VALUE THEORY AND THE ACADEMIC RESPECTABILITY BARRIER

We often claim that SCIENCE & SOCIETY has a long shelf life. Work published in S&S often resurfaces long after its first appearance, and has (what might be called) a high organic composition of impact: a high ratio of indirect to direct influence and citation. We are always pleased to have an opportunity to illustrate. To wit: the New York Review of Books (issue of November 6, 2003) carried an excerpt from Gary Wills' new book, Negro President: Jefferson and the Slave Power. Wills (the prolific writer on American history, Roman Catholicism and much else) cites a study by eminent historian Russell B. Nye, "The Slave Power Conspiracy, 1830–1860," which appeared in S&S, Vol. 10, No. 3 (Summer 1946).¹ Nye's polemical object was an influential 1921 article by Chauncey Boucher; the latter denied the existence of a dominant and aggressive pro-slavery power in the ante-bellum United States. Now Wills draws upon Nye's refutation, which examines in detail the misrepresentation resulting from the three-fifths clause in the U. S. Constitution, and catalogs the many ways in which the slavocracy dominated political life.

There is, of course, much more to say about both Nye's article and Wills' book. But the proximate moral of the story is this. Publishing in SCIENCE & SOCIETY is a good way to influence future generations of scholars in your field. It is the key to immortality -- the only one, in fact, that is consistent with philosophical materialism. (Of course, to achieve this you must write a seminal paper, but that should not be too difficult for members of the S&S community.)

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A colleague recently surprised me by asking: "Is it true that even the Marxists have abandoned the labor theory of value?" I was not sure who "the Marxists" were; I was (and am) also painfully aware that Marx's value theory has come under attack from the moment of its emergence, and that this attack has generally been more intense and total than that directed against many other aspects of Marx's legacy. The idea of a substance of value -- abstract social labor -- constituting both a qualitative social reality and a quantitative dimension underlying the perceived exchange values of commodities has been made to seem so far removed from the core commitments of social science as to be, well, bizarre, and embarrassing. The co-editors of a recent collection on heterodox economics wrote, in the margin of a paper on value that I had submitted for inclusion in the collection: "The tertium comparationis² is not sustainable." No argument; just the assertion, as if that were enough. So it has never been surprising that many Marxist writers, from Oskar Lange to Ian Steedman and the post-Sraffians, and then to the Analytical or Rational Choice school, have placed the theory of value outside of their purview.

One could, of course, look more deeply at the reasons for this rejection, or cite the many currents within Marxist political economy that do not share it. I was, however, interested in what prompted my colleague's question, and she referred me to an excellent "Symposium on Class Analysis" that appeared in the American Journal of Sociology, Vol. 105, No. 6 (May 2000).

The lead paper in the symposium ("Toward a Sounder Basis for Class Analysis") is by Aage B. Sørensen of Harvard University. It begins from the premise that "there has been agreement that the original conception of exploitation proposed by Marx is untenable. It is based on a labor theory of value abandoned long ago, even by Marxist economists" (1524). This was the source of my friend's query. The symposium continues with critiques or comments by Erik Olin Wright, John H. Goldthorpe, and Dietrich Rueschemeyer & James Mahoney.

Sørensen proposes to replace Marx's theory of exploitation with one based on rent. In essentials, the idea is this. A perfectly competitive (capitalist) economy is one in which full mobility of resources exists, and every asset ("capital"; labor) therefore receives its "supply price": ". . . what is needed to bring out the supply of the asset" (1537). Whenever an asset holder can use natural or artificial means to restrict the supply of the asset held and thus receive a price greater than the competitive supply price, the result is rent. This is exploitation, and exploitation is the basis for a class analysis that transcends the less ambitious levels with which sociology has historically contended: class based on life chances along many dimensions. Sørensen thus seeks to incorporate important aspects of Marx's approach to social class into his framework: classes are social groups in a position of structured antagonism, with the welfare of each of two classes in this binary relationship depending inversely on that of the other. Exploitation involves exclusion of the exploited group from access to resources, an exclusion marked by the capture of rents.

This approach, however, yields some surprising conclusions, which do not (to put it mildly) square well with long-standing intuition. First, as Wright observes in his response (1561), "capitalist property relations by themselves do not generate classes" or exploitation. Moreover, rents are, as Sørensen notes, heterogeneous, and much of his paper is devoted to detailing this heterogeneity. When workers restrict the supply of labor by forming unions, they generate rents in the form of wages higher than the "supply price" of labor, and therefore become an exploiting class. Minimum wage legislation and the welfare state also reduce inequality by creating rents. In fact, the entire thrust of the recent conservative political trend in most capitalist countries is toward rent destruction, and this is the source of the widely observed increase in inequality. Sørensen is in fact an advocate of social and political measures to mitigate inequality and protect low-income sectors of the population, and according to his own definitions, therefore, he is an advocate of rent, and exploitation. It also becomes very unclear how exploitation classes formed on the basis of rent extraction could be the basis for political mobilization. Somewhat contradictorily, Sørensen writes: "It is to the advantage of the capitalist class to produce a labor market conforming to the assumption of neoclassical economics . . . capitalism in the last decades has been successful in eliminating rents to labor" (1554). This "capitalist class," however, is apparently not a "class" according to the rent definition, so the source of its agency and power is not clear.

In his "Reflections on Sørensen's 'Sounder Basis'," Erik Olin Wright proceeds from within the Analytical Marxist tradition, and therefore proposes that "a rigorous concept of exploitation can be elaborated without the use of the labor theory of value" (1559).³ Wright identifies two elements in the definition of exploitation that he shares with Sørensen -- the inverse interdependent welfare principle, and the exclusion principle -- but then argues that a third criterion must be added, which he calls "the appropriation principle": "Exploiters appropriate the labor effort of the exploited" (1563). This makes it possible to distinguish between, e.g., the treatment of indigenous peoples in North America and their treatment in South Africa. In the latter case, colonizers established a forced system of transfer of fruits of labor -- exploitation according to Wright's definition. In the former, because of low population density or for other reasons this was not possible, and exclusion was enforced by genocide. This was an extreme form of what Wright calls "nonexploitative oppression," but it was not exploitation. The distinction captures the "strong sense in which exploiters depend upon and need the exploited" (1565, italics in original).

Adding the labor-transfer condition also clears up the intuitive mess generated by Sørensen's rent-based approach. Low-wage workers who form a union, for example, acquire a rent by Sørensen's definition, but they do not appropriate the labor of others, and therefore do not form an exploiting class. Their rents should "be thought of as a mitigation of capitalist exploitation rather than a form of exploitation in its own right" (1570).

This last formulation, however, presumes the existence of capitalist exploitation, and Wright's critique therefore rests on his ability to show that in Sørensen's regime of perfect competition, this exploitation would still be taking place. He draws on John Roemer's test: would workers be better off if capitalist-owned property were redistributed, thus eliminating their exclusion from the means of production? (This would establish inverse interdependence.) The argument is a formal one:

In the initial condition capitalists have a choice of either consuming their capital or investing it, as well as the choice of whether or not they will work for earnings. Workers only have the latter choice. To be sure, they can borrow capital (and in a world of perfect information they would not need collateral to do so since there would be no transaction costs, no monitoring costs, no possibility of opportunism), but still workers would be better off owning capital outright than having to borrow it. (1566-67.)

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1. The issue also contains (partial listing): "On Science and Social Change," by Joseph Needham; "Consciousness in the Light of Dialectical Materialism," by S. L. Rubinstein; "Benedetto Croce and His Concept of Liberty," by Antonio Gramsci; and reviews by Edwin Berry Burgum, Gaylord Leroy, Ellen Fewkes, E. J. Hobsbawm, and Margaret Schlauch. Rooting about in S&S' past is always an adventure!

2. Tertium comparationis: the third element contained in two qualitatively distinct commodities, which renders them quantitatively comparable. See Capital, I, ch. 1.

3. In this brief review I am simplifying the arguments of both Sørensen and Wright, and ignoring the contributions of Goldthorpe and Rueschemeyer & Mahoney, which contain valuable insights moving in other directions.

It should be noted that Marx never used the term "labor theory of value." He refers most often to the "law of value." While writers of an orthodox bent cite this fact, contextual evidence suggests that grasping the substance of value as consisting of abstract social labor time is central to the "law of value" as Marx conceived it, and the presentation of (labor) value as underlying exchange value in Capital, I, ch. 1 is crystal clear. The term "labor theory of value," then, may not be a serious distortion of his intentions.

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