The Failed Attempt to Rescue Marx’s Labor Theory of Value

“Without the notion of socially necessary labor time, nothing in Marx’s value form or overall theory of exploitation makes sense.”

Editor’s note: The following constitutes the second part of Jonathan Church’s two-part critique of “Karl Marx on Value” by Matt McManus and Conrad Bongard Hamilton.

We briefly return to Marx’s particular notion of surplus value. For Marx, surplus value results when the length of the working day exceeds the socially necessary labor time required to produce a use value. It is then that the revenue obtained from selling the output of a working day exceeds the wages paid to the worker. This is the essential point: By virtue of his control of the means of production, a capitalist can decide to pay a worker a wage equal to the value of socially necessary labor time while keeping the wheels of production (i.e., capital accumulation) churning for the entire day. Meanwhile, the capitalist receives the full exchange value (revenue) at which he sells the output of a working day.

If we accept this story, then all that follows in Marx’s analysis makes sense. This is why “conservative pundits” (and many others) say that Marxian economics relies crucially on the labor theory of value. Without the notion of socially necessary labor time, nothing in Marx’s value form or overall theory of exploitation makes sense. Without it, we do not have the concepts of absolute and relative surplus value, and, without these two notions, the dichotomy between exchange value and use value says little—if anything—about the distortion of value or the nature of exploitation.

So, what is the alternative? McManus and Hamilton hint at it when they write that “[m]ainstream economics has, since Marx’s death, accordingly turned its back on [Marx’s] thought, preferring to see value as arising from the subjective desires of consumers (as with marginal-utility economics).” They are headed in the right direction but, unfortunately, still fall wide of the mark because they are straining to rescue the notion that labor is fundamental to value.