Is Marx's Theory of Value Sound? (1925)

From the May 1925 issue of the Socialist Standard

A Debate at Leyton.

About five hundred people were present at the Leyton Town Hall, on Sunday, March 8th, to hear the debate between the London Constitutional Labour Movement and the S.P.G.B. The subject for debate was, "Is Marx’s Theory of Value Unsound? ” Councillor A. Smith occupied the chair.

Mr. Kirkley (of the L.C.L.M.) opened the debate to show that “Marx’s Theory is unsound.” He stated that the subject for debate was of the greatest importance, and indeed, so exceedingly deep that he doubted whether all in the audience would fully comprehend the arguments advanced by both sides. It was necessary for them to understand Marx, for in his opinion, much of the industrial unrest of to-day could be traced to the influence of Marx’s writings.

Much that had been written against Marx’s Theories could be correctly described a£ rubbish. Undoubtedly Marx was an able man; in fact he was a genius. Therefore his views could not be easily dismissed. Mr. Kirkley then dwelt at length with facts concerning the birthplace of Karl Marx. Marx had studied Law, Philosophy and History and had gained a degree on Philosophy at the University of Jena with a thesis on Epicurian and Democritian Philosophy.

The first nine chapters of Marx’s work, “Das Capital,” contain the essence of his theory of value. Therein Marx had defined wealth as an immense accumulation of commodities. Each of these commodities, said Marx, had value, that value being determined in a certain way. It was here that he parted company with Marx. Take the case of a chair. It required labour to make that chair, but we must remember that it was only produced because there was a demand for the chair. The chair has a value because it is a useful article. It was Marx’s contention that the value of the chair is determined by the amount of labour embodied in it. He, Mr. Kirkley, had now readied the main point of the discussion, but since the time of his first speech had now expired, he would reserve his main criticism until his next speech.

Comrade Reynolds, on behalf of the S.P.G.B., stated that he agreed with his opponent that much rubbish had been written against Marx. If any person in the hall had not previously heard what Marx’s theory of value was, the remarks of Mr. Kirkley, who had set out to oppose that theory, would not have enlightened them one iota upon the subject. More than one half of Mr. Kirkley's time had been spent on points concerning the birth certificate of Karl Marx. We were not here to discuss that, but to debate Marx’s theory of value. Mr. Kirkley had failed not only to disprove that theory, but to state that theory correctly. In view of this, he, Comrade Reynolds, would state it, but before doing so would make a few remarks concerning the meaning of certain terms to be used in the debate. The term value, as used in Political Economy, must not be confused with the same term which we all use to express our likes and dislikes in various ways. In economic science, as in other sciences, certain terms are used to express specific meanings. The political economist John Stuart Mill says :—

"The word value, when used without adjunct, always means, in political economy, value in exchange."

In that sense we were concerned with the word value in this debate. Again, there is the word wealth, which is commonly understood to signify only money. For the purposes of political economy, the term wealth embraces all those things which are the result of human energy having been applied to nature given material. Hats, boots, clothes, ships, houses, gold and silver, etc., come within the real meaning of wealth. At present we are concerned with the theory which explains exchange relationship between commodities. Commodities are useful articles which are produced, not for their use to their producers, but for the purpose of exchange.

Thinkers in the past have endeavoured to discover the basis of the exchange relationship of these commodities. Aristotle, one of the greatest thinkers of ancient Greece, had applied his mind to the subject, and saw that exchange implied equality. As to what the basis of the equality in exchange was, Aristotle never saw. Between the seventeenth and the early part of the nineteenth centuries, a number of political economists formulated theories of value which regarded labour as the basis of value in exchange. The chief of these economists as far as England is concerned, were Sir W. Petty, Adam Smith and David Ricardo. After quoting and indicating the shortcomings of these economists Comrade Reynolds said the labour theory of value was for the first time scientifically worked out by Karl Marx. Marx laid it down that the value of commodities is determined by the amount of labour socially necessary for their production and reproduction; the amount of that socially necessary labour being measured by time. Thus according to Marx’s theory, value is socially not individually determined. This point is of vital importance. Mr. Kirkley had stated that the labour embodied in the chair determined its value. Mr. Kirkley was wrong. If therefore Mr. Kirkley intended to build up a case against Marx on that unsound foundation his case must inevitably collapse. After elaborating upon Marx’s theory, Comrade Reynolds said probably there were some in the audience who wonder how, if exchange is conducted on the basis of equality, profit is obtained. The explanation is quite a simple one. Of all the commodities exchanged in the market there is one peculiar commodity known as labour power. That commodity is represented by the mental and physical capabilities of the men and women of the working class. Since the workers under capitalism have no means of obtaining a living other than by way of selling their power to labour, that labour power becomes a commodity. Like other commodities, it is, broadly speaking, paid for or exchanged at its value. But between the value of labour power and the value of its product there is a difference. The capitalist does not employ workers from a motive of philanthropy. Capitalism could not exist in that way. The workers produce the wealth, only a portion of that wealth is returned to them, the remainder being retained or appropriated by the capitalist. The difference between what the workers produce and what they get in wages is generally known as profit, but called by Marx surplus value. That profit or surplus value, though not realised until the exchange of commodities takes place, is actually derived from the process of production, and represents the unpaid labour of the workers. The Marxian theory of value, not only shows us what value is, and how it is determined, but also shows us the source from which flow the riches and poverty in modern society. He, Reynolds, would now ask his opponent to attempt a refutation of Marx’s theory.

Mr. Kirkley in his next speech of twenty minutes congratulated Reynolds upon his knowledge of Marx. It was absurd to say that there was such a thing as surplus value. In the production of wealth there were five requisites, viz: Land, Capital, Labour, Enterprise and Ability. The Socialists recognise only one, namely labour, as sole source of wealth. The man who uses his ability is entitled to some reward. Surplus value could not arise since no matter who gets it, whether the Duke of Devonshire or the Duke of Northumberland, it all comes back to the workers. The capitalist, i.e., the man of ability, either invested part of his profit in business or spent it in some way which caused employment for the workers. He regretted as much as any man the existence of poverty. He would like to see a more equitable distribution of wealth. The men of organising ability would always be required. Under no form of society, even Socialism, could the worker receive the full value of his product. „

The Chairman then called upon Comrade Reynolds to speak for twenty minutes. With scathing humour and satire Reynolds exposed the shallowness of his opponents position. Mr. Kirkley had not said one word to disprove Marx’s theory. Instead he had given utterance to a number of amazing contradictions. If surplus value did not exist how did it come back to the workers. But how surplus value came back to the workers Mr. Kirkley had not told us. Perhaps it comes back to the workers by way of a certain gentleman now spending his time in a cruise in the Mediterranean to recover from a slight attack of influenza. Perhaps it comes back by way of the tour about to be made by the Prince of Wales to South Africa and the Argentine. If surplus value comes back to the workers, why does Mr. Kirkley require a more equitable distribution of wealth? To show the absurdity of Mr. Kirkley’s statement he, Reynolds, would quote not from Marx, not from any Socialist, but from a well-known capitalist, Lord Leverhulme, who said :—

When we remember that nine-tenths of the wealth of the United Kingdom, and of probably of many other countries, belongs to one-tenth of the people, and that one-tenth of the wealth only is the portion of nine-tenths of the people, we get an idea of the scope there is for adjustment of conditions and opportunities. (“The British Dominions Year Book.")

Contrary to his opponent, who said there were five requisites for wealth production, he, Reynolds, recognised only two, namely nature given material and human energy. Ability is essential to wealth production, but who applies the ability? No other than those who belong to the working class. People who spend their time around the gaming tables of Monte Carlo, and in making pleasure trips to various parts of the world, may possess ability, but do not use that ability in the process of wealth production. No Socialist claims that under Socialism the workers will receive the full value of their product, since a certain amount must be set aside for reproductive purposes. But all that is set aside for this purpose under Socialism will be used for the benefit of the whole of society, and not as it is to-day, for the benefit of a few parasites.

The remainder of the debate was taken up by the Anti-Socialist repeating his former statements regarding surplus value, and asserting that increased production was the only remedy for working class troubles. All his points were effectively dealt with by Comrade Reynolds.

The debate was well appreciated by the audience, who showed unmistakable signs that the Socialist case was a sound one.

Undoubtedly good propaganda work was done by this debate, besides a good deal of literature being sold.

A. S. C.