THE ANALYSIS OF VALUE
Marx's debts to his classical forerunners were particularly marked in the framework he adopted for the analysis of value. Here he appropriated the essentials of the Ricardian labour-input approach.
Labour was held to be the only productive agent and the source of all value. Following Ricardo, capital goods were regarded as stored-up labour. Land, however, virtually disappeared as a separate element in the production scheme. Anything economically interesting about land could be dissolved into labour inputs.Marx's version of the labour-input approach to value, however, involved a number of modifications to Ricardian procedure. His amendments did not alter the substance of the argument appreciably but they considerably advanced its sophistication. His treatment of the familiar problem presented by the lack of homogeneity in the labour force provides an interesting case in point. The standard classical escape from this difficulty had rested on an appeal to wage differentials established in the market as a basis for weighting the economic contribution of members of the labour force. This technique, it will be recalled, was not strictly admissible on classical premises: if market prices were acceptable as measures of the value of labour, why were they not adequate in the market for commodities? Marx cannot be faulted on this score. In his view the value of labour-power was itself established by labourinputs. 'The value of labour-power is determined,' he asserted, 'as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article.'6 In other words; the labour-time necessary to provide the
means of subsistence for the work force and to permit its replacement in the next generation governed the value of unskilled labour. This amounted to a subsistence interpretation of the standard wage, though Marx was at pains to point out that the composition of the 'subsistence' bundle was not inflexible; instead it was subject to adaptation with changes in the social environment.7
Labour-input requirements for 'necessaries' thus established the floor beneath which wages could not sink.
But differentials in the remuneration of wage earners were regulated by another type of labour input: the labour-time involved in equipping workers with skills. Here Marx picked up a thread Mill had left dangling when the latter, in his protests against the earlier classical usage of the term 'productive', insisted that the training of workers (though not an activity directly involving the production of material objects) should normally be treated as 'productive'.Marx tightened the concept of labour-input further by stating explicitly the conditions under which inputs of labour were to count as creating value. The fact that labour time had been poured into the production of useful tangible commodities was not, he maintained, a sufficient test. Only 'socially necessary' inputs of labour time - by which he meant 'that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time'8 - could qualify. Marx illustrated the force of this restriction in an example dealing with the manufacture of textiles:
The introduction of power looms into England probably reduced by one-half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before: but for all that, the product of one hour of their labour represented after the change only half an hour's social labour, and consequently fell to one-half its former value.9
In his attitude toward the displacement of labour produced by the competition between advanced and traditional techniques of production, Marx sharply differentiated his position from that of many contemporary critics of industrialism. Marx had no patience for the sentimentalism of those who called for a return to rustic simplicity and who sought to turn their backs on technological progress. He insisted that the advance of mechanization in the capitalist system, however unhappy its consequences in some respects, at least had the not inconsiderable merit of adding enormously to productive capacity.
Marx attached another restriction to, his analysis of value - one that further reflected his preoccupation with the study of the capitalistic mode of production. Production for exchange, he asserted, was a prerequisite of value. Pre-capitalistic arrangements could produce outputs, but by Marxian definitions, they could produce neither commodities nor value.'10
Once these conditions had been added there was no question in Marx's mind that exchange values (or relative prices) were regulated unequivocally by the labour inputs required in the production of commodities. Under capitalism, exchange ratios between
commodities would be expressed in money terms, but this was possible only 'because all commodities, as values, are realized human labour, and therefore commensurable, that their values can be measured by one and the same special commodity, and the latter converted into the common measure of their values, i.e. into money.'11 At this stage in the argument the Ricardian puzzles about unequal durability of the components of fixed capital and the absence of uniformity in the proportions of fixed and circulating capital dropped out of the picture, though Marx later addressed himself to them in other contexts.
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