Guest Post: What Marx’s Value Theory Is and Why It Is Wrong by Bryce Francis Edwards

(Derick’s Note: This piece does not reflect my opinion, although it is an interesting enough argument that my doubts remain provisional upon the debate it will engender. However, it is a serious and substantive argument in a debate which deserves equally serious consideration.  Despite some mild disagreements in tone and possibly interpretation, I have decided to present this argument for the benefit of furthering discussion and allowing solid arguments to be aired).

To truly discover Marx’s value theory gives us dynamic insight into Marx’s thinking and writing, all of which Old Marxist Dogma cannot grasp out of its ignorance.  This is why the discoveries in my biography of Marx are so revealing, but yet cannot be touched by my opponents. The understanding of Marx’s economic theory and its historical development are prior, a partially-conceived, hazy monochromatic picture. The actual economic discovery, the discovery of breaks, revision, and the miscommunications between Marx and Engels are shattering to the Myth. The actual relation of Marx’s categories to reality, in the vivid and matured reality of Marx’s written word, forces a criticism out of their knower.

I will mostly be leaving it to my other works for citations, evidence, and the full-scope of the scientific stance to Marx’s economics and his value theory.(1) This article will show what Marx’s theory of value is, why it is wrong, without going into the all the complexities of interpreting the text, as my other works do, most importantly, the definition of ‘value’ will not be drawn into question here, as it is in my Critique. Here I will show the reading in consistency with my previous works, already cited, and will be using mostly logic to show how this way of reading Marx is the only way of reading Marx where his other proposals make consistent sense as a logical conclusion of what is in the value theory, as opposed to other proposals. I then ask that those who wish to oppose the reading in this article instead make their criticisms at my biography and Critique, where I have the textual evidence needed for a fair debate.

  1. What Is Marx’s Value Theory?

Marx referred to ‘his value theory’ or the ‘nature of value’ only a few times. For one, in the post-face to the second edition of Capital volume one, Marx speaks of “the chapter on the theory of value”, which he makes obvious is the first chapter, nobody should be denying this. Also important, we can look to Marx’s very revealing 1881 notes on Wagner, where he explicitly and implicitly mentions ‘his theory of value’ as well as his contrast to Ricardo’s theory of value; also referring to the similar contents of chapter 20 section 3(d) of Marx’s fourth volume of capital, Theories of Surplus Value. If Marx was an economist his value theory is an economic theory amounting to more than describing labor under capitalism as is so quickly substituted for it.

What we are given as this theory is the proposition that (socially necessary) (useful) labor time determines exchange-ratios, and that “money in a particular, determinate form”(2) is the solution to measuring the values of commodities.

  1. Determination

Two important questions for economic theory is inquiry into what determines the ratio in which commodities are found to exchange with one another; as well as inquiry into the measurement of commodities.

Three common solutions to determination exist. (1) (Marginal) Subjective determination. (2) What I call wage-determination (which says that labor is a cost of production, and that its extended usage increases the cost of producing and then price). (3) and the “competition” of supply and demand.

Marx would never deny (3), as he can be so often falsely criticized for. Although Marx’s value theory is often read as wage-determination (2), actually even Engels read this out of Marx. However, it is then cruelly ironic that Marx makes such harsh criticisms of wage-determination in his post-1861 era. Marx shows how the problem with wage-determination is that wages themselves are prices which’s determination must themselves be explained. We cannot solve a problem by assuming we already solved it.

Marx’s solution was that labor time determined exchange ratios, and by that he did not mean wage-determination. He made what will turn out to be his fatal observation, that, when employees go to work, they are compelled to produce for capital, and by that they produce value. What then determines the exchange-ratio is the proletariat that produces the exchange-ratio. This is what the superficial reading of Marx’s economics misses; as well as the flaw in Marx’s economics which is missed.

We can now move to see how what is beyond the first chapter of Marx’s capital follows logically from the value theory he originally laid out in the beginning off the book; a richness of the text missed by the Dogmatic readers.  If the exchange-ratios are determined by labor time, all remaining equal, the longer they produce, the more value they determine. However, the competition between capitalists forces the adoption of faster productivity (and hence cheaper magnitudes) in the face of market extinction. Additionally, if what is produced is not useful, it will not be sold, no exchange-value, no value, and hence only useful labor producing useful commodities, in socially acceptable levels of productivity, can determine magnitudes of value.

Let’s continue with the consequences of seeing the determination in Marx’s theory. If labor produces (determines) this magnitude in time, and the workers do not receive all of what they produce, their working time can be extended resulting in larger surplus magnitudes. If some workers are skilled they can produce more value in time. If only labor can determine, then the accumulation of constant capital itself, has the tendency to lower the rate of profit. If labor produces ratios, then it is the abstract quality of labor which determines, rather than only one-sided particular expressions of the abstract universal, labor; etc. etc.
We can see how Marx writes some premises which open up into all the consequences of the later volumes. All the time, the superficial readers of Marx talk about Marx’s value theory unfolding into the later chapters and volumes, but all that exists is this empty statement. Only by grasping the inner truth of Marx’s theory can its real actual richness be grasped, and Marx’s works can be seen as the work of art it was intended to be. And here is why the alternative readings of Marx can’t make sense out of Marx; if Marx was determining anything else by labor time (ignoring textual evidence that suggests otherwise) none of the above conclusions make any sense.


Let’s make some mentioning on measure before the flaw in Marx’s determination is laid out. The significance of measure is rather minor in regards to what we are doing here; although, measure is the second half of Marx’s value theory, the first half being determination.

Measure is the standard of comparison between things, including commodities. The standard of measure can be referred to as “the third thing”.

A seemingly possible alternative reading to mine is to say that Marx was determining the solution to the third thing (measure) by labor time; thus I would be inaccurately portraying Marx as determining exchange-ratios if this were true. For one, textual support for this counter reading can only be found in the economically young Marx, authoritatively, prior to 1861. Moreover, as said above in the last section, if Marx was determining measure by labor time, the conclusions laid out would not logically follow; to say they did logically follow would be immaterial. Yet moreover, in the ‘chapter on value’, Marx speaks on the difference between skilled and unskilled labor, where he says skilled labor is a multiple of unskilled labor. Quite a funny statement if Marx was determining labor time as measure by the labor time of the proletariat. Then here one standard of measure would be used, and here another standard, and for no other reason than a categorization of who is and is not skilled by someone’s criteria of labor skill. Obviously this is would be an unscientifically arbitrary measure, when the defenders of Marx give themselves great pride in critiquing subjective “value theories”.

The proposal that Marx was determining measure by labor time will fails us logically and textually. The actual reading counter poses Marx to Ricardo. Where Ricardo is known for proposing that labor is “the” standard of measure, only the economically young Marx agreed. This is another reason why the connection between Marx’s 1881 notes on Wager and chapter 20 section 3(d) of Theories of Surplus Value is important. These two key text are a concentrated place for the mature Marx to draw this distinction between him and Ricardo.

For the mature Marx, ‘to be looking to measure the values of commodities’ “…the values of commodities must already be presupposed”(3). Marx, taking his determination theory to be true, can see something objective to measure, instead creating something to use as measure. Here, Marx criticizes the essentialist idea (even of his younger self) that labor is the “true” solution to a criterion of measure as Ricardo proposed and Marxists claim Marx proposed.

  1. The Error

Exchange is between two parties, the producer and the consumer; it is in this social relation, in relation to the rest of capitalism’s reproduction, in which the solution to what determines exchange-ratios can be found. To say the ratio which these parties exchange at, is a result of the labor time of the employee in the workplace, lacks a material basis to this claim of causality.

Marx’s reason for supporting the determination of exchange-ratios by labor time was based on the metaphorical observation that labor “produces exchange-ratios”. If labor produced bread, to be exchanged for a quantity of money, we could metaphorically say labor produced the monetary units, or that it generated revenue.

The metaphor although forgets about the process of exchange, all it can do is focus on the employee in the workplace, and take for granted the rest of the interactions in the generation of value. From the perspective of the metaphor, it was labor that conjured up the money, when really the consumer offered the seller the money in exchange.
The fault in Marx’s theory is then actually quite simple. There is no link between exchange-ratio determination and Marx’s labor theory. Although let me warn of an interpretation of Marx’s theory which makes partial sense of reality, but although, will fail to be Marx’s theory, even “the beginner” will see this.

If we assume prices have already been determined, we already fail on proposing a determination theory, however let’s continue with this to make a semi-working interpretation of Marx’s theory; if we assume prices have already been determined, and we assume constant demand for output exists, if labor produces commodities that already have prices, then in time, the greater quantity of commodities produced, the greater the total revenue labor would make. Here we seem to have a working theory that labor time determines by producing. Yet as said above, we don’t have a determination theory itself; I have called this one-sided absolute revenue determination. Lastly, I can point out that this theory is not a function of labor time, but a function of output facilitated by labor time, thus higher productivity can spit out more output with previously determined prices and enlarge revenue, or machines can perform this same facility; here there is no reason to say that values fall with less labor time, and moreover no reason to explain why Marx proposed the rate of profit falls. The theory is not a theory of determination, nor is it Marx’s theory that labor is the source of value.

My assumption is that one-sided absolute revenue determination, along with the metaphor, is what pushed Marx into error. I assume he accepted the metaphor and occasionally conflated his theory with the truer parts of absolute revenue determination; truly taking his determination theory it as a truth without thinking it through. Having labor-based theories of value popular in his time can aid in one taking this theory for granted. It should also be noted that he then did not take himself out to justify a labor-based theory of value. This is obvious from reading his works, he accepts it as a premise and makes a contribution to it, and moreover a good contribution, even a scientific contribution albeit to an unscientific foundation.

Once this last loose end is tied up, my case against Marx’s theory has been made. Further explanation and textual evidence, as indicated before, can be found in my biography and Critique; everything said here is in consistency with my other works.


(2) Chapter 20 section 3(d), Theories of Surplus Value

(3) Chapter 20 section 3(d)


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