<chapter id="fetkm_03">
    <title> From Rejection to Acceptance of the Labor Theory of Value </title>

    <para> The best way to understand something is to begin by not
      understanding it. This time-honored popular saying is reflected
      in the attitude the young Marx adopted toward the labor theory
      of value, which had been worked out by the British classical
      school of political economy and which was later to be brought to
      perfection by Marx himself.
    </para>

    <para> In the critical notes which accompany his first systematic
      study of political economy, <footnote> <simpara>
	  <emphasis>MEGA,</emphasis> I, 3, pp. 409-583.
	</simpara>
      </footnote>
      Marx explicitly rejects labor as the basis of value. In
      <emphasis>The Poverty of Philosophy,</emphasis> he no less
      explicitly accepts it. A period of three years elapsed between
      these two works, from the beginning of 1844 to the beginning of
      1847. How did Marx&rsquo;s thinking on economic questions evolve
      during this period? Can one define more precisely, if not the
      exact moment then at least the approximate period when Marx
      accepted the labor theory of value? These are the two questions
      which we shall endeavor to answer.
    </para>

    <para> The starting point for this analysis is found in Marx&rsquo;s
      reading notes taken during his exile in Paris, notes which
      extend over an entire year (from the beginning of 1844 to the
      beginning of 1845). The common assumption that these notes are
      in chronological order is more than plausible and has been
      accepted by all the commentators known to me. <footnote>
      <simpara>
	  See in particular, D.I. Rosenberg, <emphasis>Die
	    Entwicklung,</emphasis> p. 95.
	</simpara>
      </footnote>
      Attentive study of these notes thus enables us to observe a
      definite evolution of Marx&rsquo;s attitude to the labor theory of
      value.
    </para>

    <para> The economists on whom Marx comments appear in his notes
      <superscript>~41~</superscript> in the following order:
      Jean-Baptiste Say, Adam Smith, Ricardo (in the French edition,
      with critical notes by Say), James Mill, John Ramsay,
      MacCulloch, and Pierre Boisguillebert. It was in Adam Smith&rsquo;s
      work that Marx first encountered the classical definition of
      value. He transcribed the following passage from <emphasis>The
      Wealth of Nations:</emphasis> &ldquo;It was not by gold or by
      silver, but by labor, that all the wealth of the world was
      originally purchased; and its value, to those who possess it,
      and who want to exchange it for some new productions, is
      precisely equal to the quantity of labor which it can enable
      them to purchase or command.&rdquo; <footnote> <simpara>Adam
	  Smith, <emphasis>The Wealth of Nations,</emphasis> Book I,
	  pp. 30-31; quoted by Marx in <emphasis>MEGA,</emphasis> I, 3,
	  p. 460.</simpara>
      </footnote>
      But he adds no comment, reserving his criticism for another
      passage, in which Smith deduced the division of labor from a
      need for exchange, the existence of exchange depending in its
      turn on the previous existence of the division of
      labor. <footnote>
	<simpara><emphasis>MEGA,</emphasis> I, 3, p. 458.</simpara>
      </footnote>
    </para>

    <para> It is when Marx tackles Ricardo that he develops his
      polemic against the labor theory of value. He does this by
      following step by step the polemic Engels had already developed
      on the same subject in his <emphasis>Outlines of a Critique of
      Political Economy.</emphasis> The value of commodities is still
      conceived as identical with their price. It is made up of an
      element contributed by labor and another element supplied by the
      materials on which labor works. Marx approves of Proudhon&rsquo;s
      remark that rent and profit are &ldquo;super-added&rdquo; and
      thus are a factor in bringing about increases in price. <footnote>
	<simpara>Ibid., p. 501.</simpara>
      </footnote>
      He agrees when Say reproaches Ricardo with leaving out the role
      of demand in determining value. He reduces the law of supply and
      demand to two phenomena of competition: competition between
      manufacturers, which determines supply, and competition between
      consumers, which determines demand. But he concludes,
      criticizing Say, that this latter breaks down in practice into
      considerations of fashion, caprice, and chance. <footnote>
	<simpara>Ibid., p. 493.</simpara>
      </footnote>
      And he does not at all accept the &ldquo;law of markets,&rdquo;
      which postulates an ultimate identity between supply and demand,
      making incomprehensible the phenomenon of periodical crises.
    </para>

    <para> <superscript>~42~</superscript> Marx&rsquo;s fundamental complaint
      about the labor theory of value, however, is that political
      economy is obliged not to take account of competition. Yet
      competition is a reality. In order that its laws may have
      greater cohesion, political economy is thus forced to regard
      reality as accidental and abstraction alone as real. <footnote>
	<simpara> Ibid., p. 502. </simpara>
      </footnote>
    </para>

    <para> This objection is all the more valid in Marx&rsquo;s eyes because
      he blames political economy precisely for <emphasis>concealing a
      relationship of exploitation,</emphasis> contained in the
      institution of private property, behind abstract juridical
      considerations. If in the case of private property it is
      necessary to come down from abstract principles to tangible
      reality in order to grasp the nature of &ldquo;civil
      society,&rdquo; why should the same procedure not be appropriate
      in the sphere of value? There also the world of abstract
      conceptions must be abandoned in favor of
      &ldquo;phenomenological reality,&rdquo; that is, the world of
      prices. <footnote>
	<simpara> See also Rosenberg, <emphasis>Die
	    Entwicklung,</emphasis> pp. 92-93.</simpara> 
      </footnote>
    </para>

    <para> Marx adds to this criticism of the labor theory of value a
      very shrewd remark about &ldquo;labor value&rdquo; in Ricardo&rsquo;s
      theory. &ldquo;At the beginning of this chapter the
      philanthropic Ricardo presents the means of subsistence as the
      natural price of the worker, and so equally as the sole aim of
      his labor, since he works in order to get wages. What then
      becomes of his intellectual faculties? But Ricardo seeks only
      [to confirm] the distinctions between different classes. This is
      the usual circular argument of political economy. The aim is
      spiritual freedom. Therefore it is necessary [to impose]
      spiritual slavery on the majority. Physical needs are not only
      the aim [of life]. They therefore become the only aim for the
      majority.&rdquo; <footnote>
	<simpara> <emphasis>MEGA,</emphasis> I, 3, p. 504. Joachim
	  Bischoff, in a review of this book published in
	  <emphasis>Das Argument</emphasis> in October 1969, says that
	  it is at least &ldquo;questionable&rdquo; to present the
	  development of Marx&rsquo;s economic thinking as proceeding from
	  rejection to acceptance of the labor theory of value. He
	  justifies his doubts by analyzing a mere two passages from
	  Marx and not by analyzing Marx&rsquo;s manuscripts of 1844 as a
	  whole, which put my conclusion beyond doubt. After my book
	  appeared I received the interesting and thorough study made
	  by Walter Tuchscheere, a young scholar in the German
	  Democratic Republic who died prematurely, an analysis which
	  confirms in all respects my own analysis of this period of
	  Marx&rsquo;s economic thought. (<emphasis>Bevor &ldquo;Das
	    Kapital&rdquo; entstand,</emphasis> pp. 94-96, 115,
	  <emphasis>et seq.</emphasis>) The same is true for a work by
	  a Soviet author which appeared after mine, Witali
	  Solomonowitsch Wygodski&rsquo;s <emphasis>Die Geschichte einer
	    grossen Entdeckung: &Uuml;ber die Entstehung des Werkes
	    &ldquo;Das Kapital&rdquo; von Karl Marx.</emphasis></simpara>
      </footnote>
    </para>
    
    <para> <superscript>~43~</superscript> In the same context, Marx
      later bursts out at Ricardo&rsquo;s declaration that only the net
      income (presented as the sum of profit and rent) of a country
      matters, and not its gross income. &ldquo;In the fact that
      political economy denies any importance to gross income, that
      is, to the amount of production and consumption, leaving aside
      what is superfluous, and that it thereby denies any importance
      to life itself, its abstraction reaches the peak of infamy. Here
      we perceive (1) that political economy is not in the least
      concerned with the national interest, with many, but solely with
      a net income made up of profit and rent, that it regards
      <emphasis>that</emphasis> as the ultimate aim of the nation; (2)
      that man&rsquo;s life has no value in itself; (3) that more
      particularly the value of the working class reduces to its
      essential cost of production, and it is there merely to
      [produce] profit for the capitalists and rent for the
      landowners.&rdquo; <footnote> <simpara>
	  <emphasis>MEGA,</emphasis> I, 3, p. 514 </simpara>
      </footnote>
    </para>

    <para> However, as soon as he examines the criticisms of Ricardo&rsquo;s
      thesis made by Say and Sismondi, Marx takes a step forward. What
      these two economists deny, he says, is the cynical expression of
      an economic truth. <footnote>
	<simpara> Marx was to use the same expression regarding the
	  &ldquo;cynical Ricardo&rdquo; in an article published in
	  <emphasis>Vorw&auml;rts</emphasis> of August 7 and 10,
	  1844. (&ldquo;Kritische Randglossen zum Artikel: &lsquo;Der
	  K&ouml;nig von Preussen und die Sozialreform,&rsquo;&rdquo;
	  in Mehring, ed., <emphasis>Aus dem literarischen
	    Nachlass,</emphasis> Vol. II, p. 45.)</simpara>
      </footnote>
      In order to fight against the inhuman consequences of political
      economy, Say and Sismondi must go beyond its limits. Humanism
      is, therefore, something outside the science of political
      economy, which is thus not a human science. Despite the vigor of
      polemical expression, Marx is here beginning to
      <emphasis>defend</emphasis> Ricardo against his critics, to
      grasp that what seems cynicism is really a frank recognition of
      the realities of the capitalist mode of production, which other
      writers seek to conceal.
    </para>

    <para> When he comments on the writings of James Mill, Marx
      resumes his complaints against &ldquo;Ricardo and his
      school.&rdquo; They leave out of the picture
      &ldquo;reality,&rdquo; which shows a disparity between costs of
      production and exchange value, and confine themselves to an
      &ldquo;abstract law.&rdquo; These notes, however, already mark a
      second step <superscript>~44~</superscript> forward: Marx does
      not entirely reject the &ldquo;abstract law,&rdquo; but regards
      it as merely &ldquo;a moment of the real movement.&rdquo; When
      supply and demand balance each other, it is indeed cost of
      production that determines price. But supply and demand balance
      each other only by way of exception, owing to their oscillations
      and disequilibrium. Political economy ought therefore to explain
      the real movement, which represents a dialectical unity of
      correspondence and noncorrespondence between cost of production
      and exchange value. <footnote> <simpara>
	  <emphasis>MEGA,</emphasis> I, 3, pp. 530-531.</simpara>
      </footnote>
    </para>

    <para> Marx&rsquo;s comments on the classical economists in his Parisian
      reading notes determine his attitude to the labor theory of
      value in his writings of 1844 and 1845&mdash;specifically in the
      <emphasis>Economic and Philosophic Manuscripts</emphasis> and
      <emphasis>The Holy Family.</emphasis> Labor value and price
      continue to be separated from each other: the former is declared
      &ldquo;abstract&rdquo; while only the latter is
      &ldquo;concrete.&rdquo; In addition, as we pointed out earlier,
      in <emphasis>The Holy Family</emphasis> the labor time that the
      production of a commodity has cost is regarded as &ldquo;forming
      part&rdquo; of its &ldquo;cost of production&rdquo;; the latter
      is not reduced by the former.
    </para>

    <para> By the time he had finished writing <emphasis>The Holy
	Family,</emphasis> Marx had already drawn up a plan for
      another work, a &ldquo;Critique of politics and political
      economy.&rdquo; On February 1, 1845, he signed a contract for
      this book with the publisher C. W. Leske, and the
      <emphasis>Economic and Philosophic Manuscripts of
	1844</emphasis> were doubtless a first draft. As early as
      January 20, 1845, Engels was urging him to finish his book on
      political economy, <footnote>
	<simpara> Ibid., III, 1, p. 10.</simpara>
      </footnote>
      which shows that Marx already had a book of this kind on his
      workbench. The manuscript seems to have been lost; <footnote>
	<simpara> Rosenberg, <emphasis>Die Entwicklung,</emphasis>
	  p. 527.</simpara>
      </footnote>
      it still existed in 1847, since in his letter to Annenkov of
      December 28, 1846, Marx wrote: &ldquo;I wish I could send you my
      book on political economy with this letter, but it has so far
      been impossible for me to get this work &hellip; printed.&rdquo;
      <footnote>
	<simpara> <emphasis>Selected Works,</emphasis> Vol. 1,
	  p. 527.</simpara>
      </footnote>
    </para>

    <para>
      In order to write it, Marx left his exile in Brussels for a
      six-week visit to Britain with Engels, and there studied all the
      books on political economy he was able to find in Manchester,
      <footnote>
	<simpara> <emphasis>Aus dem literarischen Nachlass,</emphasis>
	  Vol. II, p. 332.</simpara>
      </footnote>
      both at his <superscript>~45~</superscript> friend&rsquo;s house and in
      public and private libraries. It was during this second
      systematic confrontation with political economy that he
      discovered the social-revolutionary use that British socialist
      writers had been able to make of the labor theory of value, and
      of the contradictions it contains as expounded by Ricardo. Among
      the writers he studied in Manchester in July and August 1845
      were T. R. Edmonds and William Thompson, <footnote> <simpara>
	  <emphasis>MEGA,</emphasis> I, 6, pp. 597-622.</simpara>
      </footnote>
      who had used Ricardo&rsquo;s propositions in just that way. (After
      August he read John Bray, another writer in the same
      category). Marx was later to criticize the analysis of labor
      value as creating a &ldquo;right of the worker to the whole
      product of his labor,&rdquo; but it is more than likely that
      studying these authors made him realize the reasons, belonging
      to the realm of apologetics, why bourgeois political economy in
      Britain had turned away from Ricardo.
    </para>

    <para> There is no proof that Marx had yet read Thomas Hodgskin
      and Piercy Ravenstone, Ricardo&rsquo;s two best proletarian
      disciples. But Engels, who had studied working-class agitation
      in Britain in great detail in order to write his
      <emphasis>Condition of the Working Class in England,</emphasis>
      at least knew of the effect these writers had had on the working
      class and on the bourgeoisie.
    </para>

    <para> Ronald L. Meek writes: &ldquo;Thomas Hodgskin was a name to
      frighten little children with in the days following the repeal
      of the Combination Laws in 1824. It was probably inevitable,
      therefore, that many of the more conservative economists should
      come to regard Ricardo&rsquo;s theory of value not only as logically
      incorrect but also as socially dangerous. &lsquo;That labor is
      the sole source of wealth,&rsquo; wrote John Cazenove in 1832,
      &lsquo;seems to be a doctrine as dangerous as it is false, as it
      unhappily afford a handle to those who would represent all
      property as belonging to the working classes, and the share
      which is received by others as robbery or fraud upon
      <emphasis>them</emphasis>.&rsquo;&rdquo; <footnote>
	<simpara> Ronald L. Meek, <emphasis>Studies in the Labor
	    Theory of Value,</emphasis> p. 124.</simpara>
      </footnote>
      Marx, who had begun by regarding Ricardo as
      &ldquo;cynical,&rdquo; could not but be struck by this
      abandonment of Ricardo&rsquo;s theory of value&mdash;cynical in a
      different way&mdash;for the sake of preserving the social
      order. I am convinced that he returned from Manchester to
      Brussels with much more favorable views on the labor theory of
      value.
    </para>

    <para> <superscript>~46~</superscript> A brief remark added by Marx
      to his notes on reading the economist Charles Babbage, written
      in June or at the beginning of July 1845, on the eve of his
      departure for Manchester, shows that he still at that time
      maintained a certain neutrality toward the theory in
      question. <footnote> <simpara> <emphasis>MEGA,</emphasis> I, 6,
	  p. 601.</simpara>
      </footnote>
      But <emphasis>The German Ideology,</emphasis> written in spring
      1846, contains two definite passages which mark the acceptance
      of the labor theory of value. There we read, on the one hand:
      &ldquo;He [Stirner] has not even learned from competition the
      fact &hellip; that within the framework of competition
      <emphasis>the price of bread is determined by the cost of
	production and not by the whim</emphasis> of the
      bakers.&rdquo; <footnote>
	<simpara> <emphasis>The German Ideology,</emphasis>
	  p. 404. (Emphasis mine.&mdash;E.M.)</simpara>
      </footnote>
      And on the other hand, Marx and Engels write even more clearly:
      &ldquo;And even as regards coin, it is determined exclusively
      <emphasis>by the costs of production,</emphasis> i.e.,
      <emphasis>labor.</emphasis>&rdquo; <footnote>
	<simpara> Ibid., p. 437. (Emphasis mine.&mdash;E.M.)</simpara>
      </footnote>
      The conclusion seems inescapable: it was after July 1845 and
      before finishing <emphasis>The German Ideology</emphasis> in the
      spring of 1846 that Marx and Engels were decisively won over to
      the labor theory of value.
    </para>

    <para> It would obviously be unjust to the two friends to suspect
      them of changing their stand on the Ricardian theory merely on
      account of the <emphasis>agitational value</emphasis> of this
      theory which Marx&rsquo;s visit to Manchester had revealed to him. If
      they were able, in the course of half a year, to advance from
      the eclectic conception Engels had held in his
      <emphasis>Outlines of a Critique of Political Economy</emphasis>
      to a more precise conception of the labor theory of
      value&mdash;indeed, to a conception which already starts to
      correct certain intrinsic weaknesses in Ricardo&rsquo;s
      theory&mdash;this was above all due to the more thorough
      economic studies Marx had undertaken and to his transcending
      analytically the contradictions he had previously thought he had
      discovered in the labor theory of value.
    </para>

    <para> This transcendence can be easily appreciated in the
      following terms. What had shocked Marx when he first encountered
      Ricardo and the whole classical school was the apparent conflict
      between the effects of competition&mdash;the price fluctuations
      resulting from the operation of the law of supply and
      demand&mdash;and the comparative stability of &ldquo;exchange
      value,&rdquo; determined by the amount of labor needed for
      production. On reflection, however, his mind,
      <superscript>~47~</superscript> solidly grounded in dialectics,
      was bound to ask whether what was apparent was really the most
      direct expression of reality&mdash;and whether an
      &ldquo;abstraction&rdquo; might not contain a truth that was in
      the last analysis much more &ldquo;concrete&rdquo; than the
      appearance.
    </para>

    <para> Market prices constantly vary. If, however, one looks no
      further than these fluctuations, one runs the risk of quickly
      dissolving all economic movements in mere chance. <footnote>
	<simpara> <emphasis>MEGA,</emphasis> II, 3, p.531: &ldquo;The
	  true law of political economy is
	  <emphasis>chance,</emphasis> a few moments of the movement
	  of which we scholars arbitrarily fix under the name of
	  laws.&rdquo;</simpara> 
      </footnote>
      But a moment&rsquo;s thought, together with the empirical study of
      economic reality, show that these fluctuations do not occur at
      random but around a definite axis. If the selling price of a
      product falls below its cost of production, its manufacturer is
      pushed out of competition. If the selling price of the same
      product rises too much above the cost of production, the
      manufacturer makes a super-profit which attracts additional
      competitors to this branch of production and causes a temporary
      overproduction which brings prices down again. The cost of
      production is found empirically to be the axis around which
      prices fluctuate.
    </para>

    <para> It is interesting to refer in this connection to a critical
      comment which Marx was moved to make when re-reading Ricardo in
      1851: &ldquo;Here he admits, then, that it is not a matter of
      producing &lsquo;wealth&rsquo; in his sense of the word but of
      producing &lsquo;values.&rsquo; The &lsquo;natural price&rsquo;
      imposes itself as against the <emphasis>market price,</emphasis>
      but this takes place though [<emphasis>sic</emphasis>] a
      struggle which is nothing like the simple equalization process
      described by R[icardo]. When industry began, when demand usually
      corresponded to supply, when competition was limited and
      monopoly prices were normal in all industries, landed property
      was constantly being ousted by industrial property. This led to
      enrichment on the one hand and impoverishment on the other. The
      struggle between the market price and the real price thus did
      not result in the same phenomenon, and did not take place to the
      same extent, as in modern society. There was a permanent excess
      in the market price over the real price.&rdquo; <footnote>
	<simpara> <emphasis>Grundrisse,</emphasis> Vol. II, p. 806.</simpara>
      </footnote>
    </para>

    <para> In my view, this comment enables us to get closer to the
      actual way in which Marx advanced from rejecting the labor
      theory of <superscript>~48~</superscript> value to accepting
      it&mdash;namely, by analyzing the <emphasis>tendencies of the
      historical evolution</emphasis> of the relations between supply
      and demand in the capitalist mode of production and their
      connections with Ricardo&rsquo;s &ldquo;natural price,&rdquo; that is,
      with labor value. This analysis was to bring him to conclude
      that, because of the enormous increase in industrial production,
      this &ldquo;natural price&rdquo; increasingly becomes the rule,
      while the monopoly price that differs widely from the
      &ldquo;natural price&rdquo; increasingly becomes the
      exception. As soon as this is accepted, one is obliged to accept
      the labor theory of value, since it is then established that
      value is determined not by &ldquo;the laws of the market,&rdquo;
      but by factors immanent in production itself.
    </para>

    <para> While concurrently carrying on his economic studies
      (preparing for the &ldquo;Critique of politics and political
      economy,&rdquo; the manuscript which has been lost) and his
      studies of history and philosophy (preparing for the
      <emphasis>The German Ideology</emphasis>), Marx formulated, at
      about the same period, his theory of historical materialism,
      which is essentially a socioeconomic determinism. <footnote>
	<simpara> Paul Kaegi (<emphasis>Genesis des historischen
	    Materialismus,</emphasis> pp. 311-327) examines in great
	  detail the origins of the theory of economic determinism and
	  that of ideology, which in his view are the two essential
	  elements of the theory of historical materialism.</simpara>
      </footnote>
      The history of mankind should always be studied in connection
      with the history of industry and exchange. Mankind starts to
      differentiate itself from the animal kingdom by
      <emphasis>producing</emphasis> its means of life. What men are
      depends in the last analysis on the material conditions of their
      productive activity, and this presupposes social relations among
      them. The level of development of the productive forces is
      reflected most obviously in the development of the division of
      labor. <footnote>
	<simpara> <emphasis>The German Ideology,</emphasis> p. 32.</simpara>
      </footnote>
    </para>

    <para> In other words, the conclusion of their historical and
      philosophical studies had brought Marx and Engels to exactly the
      starting point of the classical labor theory of value, which
      Marx was to reformulate in quite a special way: (abstract) labor
      is the essence of exchange value, because in a society founded
      on the division of labor it is the only connecting web that
      makes possible comparison and commensurability between the
      products of the <superscript>~49~</superscript> labor of
      individuals who are separated from each other. There is a
      striking parallel between the way in which Marx went back from
      fluctuating &ldquo;market prices&rdquo; to a rediscovery of
      exchange value and the way in which an economist of our own day,
      Piero Sraffa, has evolved from marginalism to a theory which
      ultimately reduces all the &ldquo;inputs&rdquo; of production to
      &ldquo;dated quantities of labor.&rdquo; <footnote>
	<simpara> Piero Sraffa, <emphasis>Production of Commodities by
	    Means of Commodities,</emphasis> pp. v-vi, 34-40, 93-95,
	  etc.</simpara> 
      </footnote>
      Marx and Sraffa proceeded in the same way, <emphasis>by leaving
      aside minor, short-term fluctuations,</emphasis> which are just
      what marginalism starts from.
    </para>

    <para> When he wrote <emphasis>The Poverty of
	Philosophy,</emphasis> Marx was already a &ldquo;Ricardian,&rdquo;
      to the extent that he quotes Ricardo immediately after
	formulating the determination of the value of a commodity by
	the amount of labor needed for its production. He quotes the
	weakest part of Ricardo&rsquo;s theory, that dealing with the
	determination of the &ldquo;value&rdquo; or the &ldquo;natural
	price&rdquo; of &ldquo;labor&rdquo; by the costs of
      &ldquo;maintenance&rdquo; of working men. <footnote>
	<simpara> <emphasis>The Poverty of Philosophy,</emphasis>
	  p. 522.</simpara>
      </footnote>
    </para>

    <para> But at the same time, Marx is already separating himself
      from Ricardo on an essential point. Writing to Annenkov on
      December 28, 1846, he speaks of &ldquo;the error of the
      bourgeois economists, who regard these economic categories as
      eternal and not as historical laws which are only laws for a
      particular historical development, for a definite development of
      the productive forces.&rdquo; <footnote>
	<simpara> <emphasis>Selected Works,</emphasis> Vol. I,
	  p. 522.</simpara> 
      </footnote>
      Working out his theory of historical materialism had at one and
      the same time enabled him to grasp the &ldquo;rational
      kernel&rdquo; of the labor theory of value and its
      <emphasis>historically limited character.</emphasis> This
      conception of the historically limited character of economic
      laws became a no less integral part of Marxist economic theory
      than the labor theory of value. <footnote>
	<simpara> Professor Emile James sees in this a lasting and
	  valid contribution to economic science. (See Emile James,
	  <emphasis>Histoire sommaire de la pens&eacute;e
	    &eacute;conomique,</emphasis> pp. 168, 177.)</simpara>
      </footnote>
    </para>

    <para> In Marx&rsquo;s view this historically limited and precise
      character applies to all the &ldquo;economic categories&rdquo;;
      he sees in them, in the last analysis, only a &ldquo;certain
      social relationship.&rdquo; This is clear as regards
      <superscript>~50~</superscript> the category &ldquo;exchange
      value&rdquo; as early as <emphasis>The German
	Ideology</emphasis> and <emphasis>The Poverty of
      Philosophy.</emphasis> In his later writings Marx constantly
      returns to this same principle. <footnote>
	<simpara> &ldquo;&hellip; articles of utility become
	  commodities, only because they are products of the labor of
	  private individuals or groups of individuals who carry on
	  their work independently of each other.&rdquo;
	  (<emphasis>Capital,</emphasis> Vol. I, pp. 72-73.)</simpara>
      </footnote>
      It is therefore impossible to agree with the attempt recently
      made by Milentije Popovi&cacute; to proclaim commodity relations
      valid for all human history, right down to the total
      disappearance of living labor, and along with them the
      phenomenon of abstract labor, which Marx sees as the ultimate
      secret of exchange value. <footnote>
	<simpara> Milentije Popovi&cacute;, &ldquo;For the Re-Evaluation
	  of Marx&rsquo;s Teachings on Production and Relations of
	  Production,&rdquo; in <emphasis>Socialist Thought and
	    Practice</emphasis> (Yugoslavia), July-September
	  1965.</simpara> 
      </footnote>
    </para>

    <para> Marx himself stated his opinion on this question very
      clearly. He categorically refused to identify the need for an
      accounting in terms of labor time (which applies to every human
      society, except perhaps the most advanced stage of communist
      society) with the <emphasis>indirect</emphasis> expression of
      this accounting in the form of exchange value. <footnote>
	<simpara> Cf. Marx&rsquo;s letter to Kugelman of July 11, 1868:
	  &ldquo;The form in which this proportional division of labor
	  asserts itself, in a state of society where the
	  interconnection of social labor is manifested in the
	  <emphasis>private exchange</emphasis> of the individual
	  products of labor, is precisely the <emphasis>exchange
	    value</emphasis> of these products.&rdquo;
	  (<emphasis>Selected Works,</emphasis> Vol. II,
	  p. 419). Cf. also <emphasis>Capital,</emphasis> Vol I, p. 79
	  (the famous passage on the fetistic nature of value), where
	  Marx declares explicitly that labor time will be the
	  criterion of distribution of products in a socialist
	  society, in contrast to distribution through exchange based
	  on private labor and private property.</simpara>
      </footnote>
      And he explicitly declared that when private ownership of the
      means of production has been replaced by that of the associated
      producers, commodity production will cease, giving place to
      direct accounting in hours of labor. <footnote>
	<simpara> &ldquo;Within the cooperative society based on
	  common ownership of the means of production, the producers
	  do not exchange their products; just as little does the
	  labor employed on the product appear here <emphasis>as the
	    value</emphasis> of these products, as a material quality
	  possessed by them, since now, in contrast to capitalist
	  society, individual labor no longer exists in an indirect
	  fashion but directly as a component part of the total
	  labor.&rdquo; (<emphasis>Critique of the Gotha
	    Programme,</emphasis> in <emphasis>Selected
	    Works,</emphasis> Vol. III, p. 17.)</simpara>
      </footnote>
    </para>

    <para> One may think Marx was right or one may try to show that he
      <superscript>~51~</superscript> was wrong, but one ought not to
      ascribe to him the paternity of conceptions that were contrary
      to his own. One ought not to assert that for Marx all living
      social labor must necessarily take the form of abstract labor
      creating value <footnote>
	<simpara> Milentije Popovi&cacute; (&ldquo;For the
	  Re-Evaluation of Marx&rsquo;s Teachings on Production,&rdquo;
	  p. 79): &ldquo;Men &lsquo;produce their life&rsquo; by
	  working and producing commodities, use values. By producing
	  they embody, build into commodities their labor, with
	  concrete labor they produce&mdash;create&mdash;a definite
	  useful object (use value), with abstract labor they produce
	  value.&rdquo; Here and in the rest of this article
	  Popovi&cacute; suggests that for Marx &ldquo;production
	  relations&rdquo; and &ldquo;production of material
	  life&rdquo; always imply production of exchange value,
	  independent of social conditions and social
	  relations. &ldquo;In this sense we can say that in society
	  [<emphasis>sic</emphasis>] men &lsquo;produce their
	  life&rsquo; not only because they produce useful objects,
	  but also because at the same time they produce values&rdquo;
	  (p. 83). &ldquo;Furthermore, relations in production are
	  independent of people&rsquo;s will inasmuch as they are
	  established &lsquo;behind the backs of the producers,&rsquo;
	  outside the conscious activity of producers <emphasis>or
	    associated producers</emphasis> &hellip;&rdquo; (p. 93;
	  emphasis mine&mdash;E.M.). &ldquo;However, as a result of
	  this the very nature of labor in the abstract&mdash;the
	  creator of value&mdash;is being changed, and thereby also
	  the nature of living labor. Labor, this creator of value, is
	  no longer a mere [!] consumption of the physical strength of
	  the producers&hellip; In this way labor itself, as the
	  creator of value, assumes for man an even fuller human
	  meaning, in short, it becomes humanized&rdquo;
	  (p. 104). This is not the place to analyze these
	  propositions, which seem to me highly dubious. But it is
	  plainly false to attribute them to Marx.</simpara>

	<simpara> &ldquo;For, proceeding from the fact that the
	  relations [?] of the price of production are objectively
	  given in our conditions of self-management, one arrives at
	  the conclusion that market prices, too, are objectively
	  [<emphasis>sic</emphasis>] given in our socioeconomic
	  conditions&rdquo; (p. 110).</simpara>
      </footnote>
      and that socialism will mean not the abolition of commodity
      production but its &ldquo;humanization.&rdquo; These ideas of
      Popovi&cacute;&rsquo;s are opposed to Marx&rsquo;s entire
      teaching. <footnote>
	<simpara> Here is a particularly clear-cut passage in Marx,
	  relating to Prodhoun but also applicable to Milentije
	  Popovi&cacute;: &ldquo;The determination of value by labor
	  time&mdash;the formula M. Prodhoun gives us as the
	  regenerating formula of the future&mdash;is therefore merely
	  the scientific expression of the economic relations of
	  present-day society &hellip;&rdquo; (<emphasis>The Poverty
	    of Philosophy,</emphasis> p. 69).</simpara>
      </footnote>
    </para>
  </chapter>