Joan Robinson and the Labor Theory of Value

Article of the Week from Fixing the Economists

by Philip Pilkington

Here’s an interesting thought from Geoff Harcourt on Joan Robinson’s relationship with the Marxist economist (and possible Soviet infiltrator) Maurice Dobb which also goes into what she thought about the labour theory of value (excuse the Americanised spelling in the title, but you must fish for hits on Google…).

I think I should comment on it because I really dislike the labour theory of value for the same reasons as Robinson and I think Harcourt and King (the interviewer) are being immensely unfair here:

She thought [Dobb] was schizophrenic. She could never understand him. Here he was, this great Communist, Marxist, out of office hours, teaching Marshall in office hours. And I think Maurice thought that she was an upper-class bourgeois liberal with pinkish overtones who wouldn’t go the whole hog. And also, I think, he was offended by her rather philistine, very British, attitude to the philosophical problems of the labor theory of value, whereas he argued that the labor theory of value was the base on which you should erect Marxism, in his essay on “The Need for A Theory of Value” in Political Economy and Capitalism (Dobb 1937: Chapter I). And of course he recognized — I know you [the interviewer: John King] don’t agree with me on this, but it’s what I think — that the labor theory of value was really an explanation of the origin of profits in the capitalist mode of production, and as a byproduct of that you have to explain why the prices of production don’t coincide with underlying labor values. And I think Maurice always thought of it like that, and I think Sraffa did as well, whereas to Joan it was always gobbledegook. She said, “It’s great metaphysics for stirring the workers up, but it’s not a theory. You don’t need it.” She said, “I don’t need the labor theory of value to explain why the chaps who’ve got the finance can push around the chaps who haven’t.” And it was that sort of English philistine contempt for European philosophy, I think, which rather annoyed Maurice. But this is conjecture. Joan did say to me that he was schizophrenic in his intellectual thought.

I include the biographical detail merely because I find it a part of the interesting tapestry that was the left-wing in Britain in the post-war years. But what I really want to focus on a few points.

First of all the notion that people who dislike the labour theory of value (hereafter: “LTV”) are “philistines” who don’t understand continental philosophy. This is an accusation often thrown around by Marxists who believe in the LTV. It is one that permeates the whole of the interview with both Harcourt and King talking as if Robinson didn’t have the intellectual sophistication to understand the LTV. It is an absolutely odious criticism for two reasons. First of all, because numerous continental philosophers have criticised Marx’s materialist philosophical views on which the LTV is based as being inconsistent with the tradition he was following — and have done so fairly consistently throughout the 20th century.

Secondly, and tied to this, the most powerful criticism of the LTV is precisely from a continental philosophical viewpoint. Marx borrowed his arguments from Hegel but largely misunderstood him — as was often pointed out to him by his friend and hand-picked heir to Hegel Bruno Bauer. For Hegel and for most other actual continental philosophy materialism makes no sense at all because you cannot assume that there exists an “out there” independent of what is in your head. This leads to many conclusions, such as that value is entirely relative — as I have argued before from the viewpoint of contemporary continental philosophy — and cannot be measured in terms of physical human exertion which is completely arbitrary.

It is the Marxists who have a poor understanding of continental philosophy, not their opponents. Their version of continental philosophy is handed down to them, frankly, by a second-rate Hegelian who always refused to recognise the contradictions of deploying Hegelian/Idealist thought to a naive materialism. You can see this in the way Marxists banish such debates by turning the term “Idealism” into a pejorative among themselves and never engaging with genuinely Idealist critiques beyond deploying their crudely constructed pejorative. If you’re dubbed an “Idealist” you’re below debate in Marxist circles; such is enough to disqualify you. Why? Because Marx said so; that’s why.

The other point I want to deal with is more so economics than it is philosophy. Harcourt says that:

“the labor theory of value was really an explanation of the origin of profits in the capitalist mode of production, and as a byproduct of that you have to explain why the prices of production don’t coincide with underlying labor values.”

He also says this as if Robinson didn’t “get” it at some level. I think she “got” it perfectly well but she recognised it for what it is: a moral judgment and not an economic judgment.

Such a statement is, as Robinson would always point out with such statements, circular. It gets its result from its assumptions and then hides its assumptions behind its result. Yes, the LTV “explains” profits in a capitalist economy perfectly well if we take the a priori view that the capitalist is simply a leech and that all value should by rights belong to the worker. Let’s put that same statement another way: the LTV “explains” profits in a capitalist economy if one is a Marxist socialist or communist.

It does no such thing, however, if one does not subscribe to such a viewpoint. If I, for example, believe that capitalists actually perform a useful social function then the LTV “explains” nothing about profits because it assumes that all value comes from workers and none from capitalists. So, really the political judgment is already “baked in” to the theory, making the theory not a theory at all but an ideology. That is what Robinson always recognised and what she always insisted upon. At no point in the discussion do Harcourt and King, who both seem to be LTV believers, actually lay out why Robinson was wrong; instead they talk among themselves like members of a church about why their deceased friend always failed to see the light and find salvation.

Addendum: Before someone points out to me the popularity of Marxism among certain 20th century continental philosophers let me just anticipate this. It is true that certain very prominent continental philosophers such as Levi-Strauss, Sartre and Merleau-Ponty were indeed Marxist in their politics. However, this was because Marxism was fashionable in certain groups at the time and their politics never really gelled with their philosophies — apart from the case of Sartre who actually altered (and I would say: debased) his philosophy later in life to try to line it up with Marxist ideas. All of this didn’t last long and what today is scorned by Marxists as “postmodernism” eventually cleared out the last remaining vestiges of Marxism among continental philosophy. Where it appeared after this it was usually just faddish rhetoric or political posturing.