| by Dr Vickramabahu Karunaratne
( January 29, Colombo, Sri Lanka Guardian) Howard Nicholas spoke at The Institute of Policy Studies of Sri Lanka, about his book on Marx’s Theory of Price & its Modern Rivals. It was humorous and witty to those who knew something about Marx and bourgeois economics. The limited audience was glued to the speaker as if he was conducting a spiritual Bhavana class. No body could say that he was making a revolutionary speech on behalf of Marx and his scientific discovery. It was a proper bourgeoisie meeting, held in Colombo 7, with ministers and bankers nodding their heads. Strangely enough I was expecting some thing like this to happen long time back, when I studied the Marxian explanation of value in the market economy. Because Marx’s theory of value is not really a theory, but a scientific discovery. Through systematic investigation of the working of market economy, he found how the system imparts a value to an item for sale, a commodity. He understood the generalised market economy and how exchanges are made and how prices are fixed. It is not a good or bad way to estimate values of an item nor is it the only way to fix a value. In previous pre capitalist societies the value was fixed in different ways. But the value or the price in a market economy is worked out automatically through the labour time input. Bourgeoisie could not accept that due to class interest.
The truth of role of labour
Hence the theories of classical economics are theories cooked up to cover the truth of the role of labour. It is easy to say that the prices are fixed by the demand in the market, because it appeared to be so. But irrespective of demand the producer has to fix value after making the item, to balance the expenditure. Howard says in the preface “To be perfectly frank, in the early phases of my post-doctoral studies I was not entirely certain of either the scientifc rigour or superiority of Marx’s theory of price, or that I had much to add to what had already been said about this theory.” As long as the bourgeoisie was powerful the muddle continued and clearly Howard got this space to come out with his understanding of Marxian explanation of price mechanism, because of the continued crisis of market economy. Time has come for every body to face the truth.
I remember the arguments put forward by Champika against the Marxian theory of value about twenty years back. Champika, then a fresh graduate from Moratuwa University worked as an assistant lecturer in the Open University. He claimed Marx has proposed a way to estimate price of an item without considering the culture and traditions within the human society. Hence it is not a universal theory of value nor is it applicable to our society. Obviously, Marx did not invent a mechanism to fix a value to an item in any absolute sense. In fact he did not construct a formula to fix value in general. On the contrary he investigated the market economy and found out how it imparts a value to an item in the market. Thus he discovered the formula for the price for a commodity. He did not put forward any ethical argument to defend it. Nor is it a product of class ideology. That is the reality and it did not make the capitalists happy, because it exposed the share of labour power in the produce. It is wrong to assume that this formula can be used to estimate the price of any artifact. Value of family silver or the grandmother’s gold pendent cannot be estimated in this manner as those are not commodities. Similarly love and affection cannot be valued as commodities. However Eric Fromm argued that love and affection have become commodities in the market economy. One falls in love after unconsciously estimating the labour power and the capital of the other person. That means market economy determination has entered the unconscious of the human. Collapse of the market may bring to the surface how much one truly cares for the other!
Howard explains “The present work has had a very long gestation. It was born out of my PhD studies in the late 1970s and early 1980s in which I attempted to understand Marx’s theory of money and the role it plays in his explanation of business cycles. As with so many who have undertaken PhDs. Once completing this study it dawned on me how little I really understood of the subject. With hindsight this should not have been surprising given the sheer scope of the endeavour, my own ignorance of the subject matter at the time, and the relative paucity of writings in this area, including those by Marx. Perhaps the real benefit of the study for me was the questions it raised in my mind rather than the answers it provided me with. In attempting to answer some of these questions in my post-doctoral research work, I kept being drawn to the theory of price, Marx’s theory of price, as the necessary point of departure for a fuller understanding of not only his theory of money and role it played for him in the cyclical movement of the capitalist system but, more fundamentally, its importance for his general explanation of the latter. Hence, the present work.” Let us make use of this precious work.