It is admitted by Marx that separate commodities exchange with each other
either over or under their value according as the share of constant capital
employed in their production is above or below the average. Stress is,
however, laid on the fact that these individual deviations which take place
in opposite directions compensate or cancel each other, so that the sum total
of all prices paid corresponds exactly with the sum of all values. "In
the same proportion in which one part of the commodities is sold above its
value another part will be sold under its value" (III, 185).[1]
The aggregate price of the commodities I to V [in the table given by Marx
as an example] would therefore be equal to their aggregate values, and would
therefore be, in fact, a money expression of the aggregate amount of labor,
both past and recent, contained in the commodities I to V. And in this way in
the community itself — when we regard the total of all the branches of
production — the sum of the prices of production of the commodities
manufactured is equal to the sum of their values. (III, 188)
From this, finally, the argument is more or less clearly deduced that at
any rate for the sum of all commodities, or for the community as a whole, the
law of value maintains its validity.
Meanwhile it resolves itself into this — that by as much as there is too
much surplus value in one commodity there is too little in another, and
therefore the deviations from value which lurk in the prices of
production reciprocally cancel each other. In capitalist production as
a whole "the general law maintains itself as the governing
tendency" only in a very complex and approximate manner, as the
constantly changing average of perpetual fluctuations. (III, 190)
This argument is not new in Marxian literature. In similar circumstances
it was maintained, a few years ago, by Conrad Schmidt, with great emphasis,
and perhaps with even greater clearness of principle than now by Marx
himself. In his attempt to solve the riddle of the average rate of profit
Schmidt also, while he employed a different line of argument from Marx,
arrived at the conclusion that separate commodities cannot exchange
with each other in proportion to the labor attaching to them. He too was obliged
to ask the question whether, in face of this fact, the validity of Marx's law
of value could any longer be maintained, and he supported his affirmative
opinion on the very argument that has just been given.
I hold the argument to be absolutely untenable. I maintained this at the
time against Conrad Schmidt, and I have no occasion today in relation to Marx
himself to make any alteration in the reasoning on which I founded my opinion
then. I may content myself now with simply repeating it word for word. In
opposing Conrad Schmidt, I asked how much or how little of the celebrated law
of value remained after so much had practically been given up, and then
continued:
That not much remains will be best shown by the efforts which the author
makes to prove that, in spite of everything, the law of value maintains its
validity. After he has admitted that the actual prices of commodities differ
from their values, he remarks that this divergence only relates to those
prices obtained by separate commodities, and that it disappears as
soon as one considers the sum of all separate commodities, the yearly
national produce, and that the total price which is paid for the whole
national produce taken together does certainly coincide entirely with the
amount of value actually embodied in it. (p. 51)
I do not know whether I shall be able to show sufficiently the bearings of
this statement, but I shall at least attempt to indicate them.
What then, we ask, is the chief object of the "law of value"? It
is nothing else than the elucidation of the exchange relations of commodities
as they actually appear to us. We wish to know, for instance, why a coat
should be worth as much in exchange as twenty yards of linen, and ten pounds
of tea as much as half a ton of iron, etc. It is plain that Marx himself so
conceives the explanatory object of the law of value. There can clearly only
be a question of an exchange relation between different separate
commodities among each other. As soon, however, as one looks at all
commodities as a whole and sums up the prices, one must studiously and
of necessity avoid looking at the relations existing inside of this whole.
The internal relative differences of price do compensate each other in the
sum total. For instance, what the tea is worth more than the iron the iron is
worth less than the tea and vice versa. In any case, when we 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 bring 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 competitor, we were to
be told that all the competitors together had taken twenty-five minutes and
thirteen seconds.
The state of the case is this: to the question of the problem of value the
followers of Marx reply first with their law of value, that commodities
exchange in proportion to the working time incorporated in them. Then they —
covertly or openly — revoke this answer in its relation to the domain of the
exchange of separate commodities, the one domain in which the problem has any
meaning, and maintain it in full force only for the whole aggregate national
produce, for a domain therefore in which the problem, being without object, could
not have been put at all. As an answer to the strict question of the problem
of value the law of value is avowedly contradicted by the facts, and in the
only application in which it is not contradicted by them it is no longer an
answer to the question which demanded a solution, but could at best only be
an answer to some other question.
It is, however, not even an answer to another question; it is no answer at
all; it is simple tautology. For, as every economist knows, commodities do
eventually exchange with commodities — when one penetrates the disguises due
to the use of money. Every commodity which comes into exchange is at one and
the same time a commodity and the price of what is given in exchange for it.
The aggregate of commodities therefore is identical with the aggregate of the
prices paid for them; or, the price of the whole national produce is nothing
else than the national produce itself. Under these circumstances, therefore,
it is quite true that the total price paid for the entire national produce
coincides exactly with the total amount of value or labor incorporated in it.
But this tautological declaration denotes no increase of true knowledge,
neither does it serve as a special test of the correctness of the alleged law
that commodities exchange in proportion to the labor embodied in them. For in
this manner one might as well, or rather as unjustly, verify any other law
one pleased — the law, for instance, that commodities exchange according to
the measure of their specific gravity. For if certainly as a "separate
ware" one pound of gold does not exchange with one pound of iron, but
with 40,000 pounds of iron; still, the total price paid for one pound
of gold and 40,000 pounds of iron taken together is nothing more and
nothing less than 40,000 pounds of iron and one pound of gold. The total
weight, therefore, of the total price — 40,001 pounds — corresponds exactly
to the like total weight of 40,001 pounds incorporated in the whole of the
commodities. Is weight consequently the true standard by which the exchange
relation of commodities is determined?
I have nothing to omit and nothing to add to this judgment in applying it
now to Marx himself, except perhaps that in advancing the argument that has
just been under criticism Marx is guilty of an additional error that cannot
be charged against Schmidt. For, in the passage just quoted from page 190 of
the third volume, Marx seeks, by a general dictum concerning the way in which
the law of value operates, to gain approval for the idea that a certain real
authority may still be ascribed to it, even if it does not rule in separate
cases. After saying that the "deviations" from value, which are
found in the prices of production, cancel each other, he adds the remark that
"in capitalist production as a whole the general law maintains itself as
the governing tendency, for the most part only in a very complex and
approximate manner as the constantly changing average of perpetual
fluctuations."
Here Marx confounds two very different things: an average of fluctuations,
and an average between permanently and fundamentally unequal quantities.
He is so far quite right that many a general law holds good solely because an
average resulting from constant fluctuations coincides with the rule declared
by the law. Every economist knows such laws. Take, for example, the law that
prices equal costs of production — that apart from special reasons for
inequality there is a tendency for wages in different branches of industry,
and for profits of capital in different branches of production, to come to a
level, and every economist is inclined to acknowledge these laws as
"laws," although perhaps there may be no absolutely exact agreement
with them in any single case; and therefore even the power to refer to a mode
of action operating on the whole, and on the average, has a strongly
captivating influence.
But the case in favor of which Marx uses this captivating reference is of
quite a different kind. In the case of prices of production which deviate
from the "values," it is not a question of fluctuations, but of
necessary and permanent divergences.
Two commodities, A and B, which contain the same amount of labor, but have
been produced by capitals of different organic composition, do not fluctuate
round the same average point, say, for example, the average of 50 shillings;
but each of them assumes permanently a different level of price: for
instance, the commodity A, in the production of which little constant
capital, demanding but little interest, has been employed, the price level of
40 shillings; and the commodity B, which has much constant capital to pay
interest on, the price level of 60 shillings, allowance being made for
fluctuation round each of these deviating levels. If we had only to deal with
fluctuations round one and the same level, so that the commodity A might
stand at one moment at 48 shillings and the commodity B at 52 shillings, and
at another moment the case were reversed, and the commodity A stood at 52
shillings and the commodity B only reached 48, then we might indeed say that
in the average the price of both of these commodities was the same, and in
such a state of things, if it were seen to obtain universally, one might
find, in spite of the fluctuations, a verification of the "law"
that commodities embodying the same amount of labor exchange on an equal
footing.
When, however, of two commodities in which the same amount of labor is
incorporated, one permanently and regularly maintains a price of 40 shillings
and the other as permanently and regularly the price of 60 shillings, a
mathematician may indeed strike an average of 50 shillings between the two;
but such an average has an entirely different meaning, or, to be more
accurate, has no meaning at all with regard to our law. A mathematical
average may always be struck between the most unequal quantities, and when it
has once been struck the deviations from it on either side always
"mutually cancel each other" according to their amount; by the same
amount exactly by which the one exceeds the average the other must of
necessity fall short. But it is evident that necessary and permanent
differences of prices in commodities of the same cost in labor, but of
unequal composition as regards capital, cannot by such playing with
"average" and "deviations that cancel each other" be
turned into a confirmation of the alleged law of value instead of a
refutation. We might just as well try in this way to prove the proposition
that animals of all kinds, elephants and May flies included, have the same
length of life; for while it is true that elephants live on an average 100
years and May flies only a single day, yet between these two quantities we
can strike an average of 50 years. By as much time as the elephants live
longer than the flies, the flies live shorter than the elephants. The
deviations from this average "mutually cancel each other," and
consequently on the whole and on the average the law that all kinds of
animals have the same length of life is established!
