1970s >> 1978 >> no-889-september-1978

The Questions They Ask . . .

“Mr. Speaker: What is the difference between capitalist economics and socialist economics?”

Speaker: (Thinks! What a smashing question!)

Answer: – The difference is the Labour Theory of Value. This law of capitalism, discovered by Marx, explains the operation of capitalist production and the exploitation of the worker.

The Labour Theory of Value states that the value of commodities is fixed by the amount of labour they contain. But not any old labour. “Socially necessary” labour, the labour required by society to produce an article. The determination of Value by the labour in an article was well known to the famous classical economists before Marx: William Petty, David Ricardo, Adam Smith and Ben Franklin the American; whom Marx quotes approvingly in Volume I of Capital (page 59, Kerr edition). “The value of all things . . . is most justly measured by labour”

The difficulty they found themselves in was this

1.    Value is determined by labour.
2.    What then determines the value of the labour?

They then went round in circles until Karl Marx cut the Gordian Knot by proving that Labour Power, as a commodity, is also subject to the Labour Theory of Value—that is, the amount of labour to produce and maintain a Labourer. Since those days capitalist “economics” have become a joke; starting with Marshall’s absurd “Marginal Utility” and finishing with J. M. Keynes’ disastrous inflation theories. Meantime the colleges teem with pompous wise-acres solemnly expatiating on “status” and “honours”, “power and conflict”, “blue-collar and white-collar workers” “the reward hierarchy” and associated trivialities.

Once you reject the Labour Theory of Value, you become an apologist—for capitalism.

The Labour Theory of Value also explains why, after 50 years of reformist legislation, Labour Parties have had no effect whatever. While they are trying to tart up capitalism with a few spraying jobs, an endless stream of profits pours into the laps of the capitalists, behind their backs.

A clear grasp of the Labour Theory of Value is a MUST for a scientific Socialist.

It is Socialist Economics!

Next question.

Horatio.