Simultaneous and Temporal Valuation Contrasted

This joint paper was presented to the Marx International II conference in Paris, 30th September-2nd October 1998. It sets out the principal propositions of the Temporal Single System Interpretation of Marx’s theory of value in a systematic and comprehensive way, making it a reference document of this school of thought. It establishes many theorems that underpin subsequent debates, for example (1) An early systematic refutation of the Fundamental Marxist Theorem (FMT) for the simultaneous interpretation and a demonstration that this yields negative profits with positive surplus value under quite normal conditions of capitalist reproduction; (2) An explanation of why simultaneous valuation cannot support Marx’s theory of the tendency of the rate of profit to fall whilst temporal valuation does; (3) A demonstration that under simultaneous valuation, the value of the product is not in general equal to the time of labour whereas under the temporal interpretation it is always so. The remainder of this paper is taken directly from the original except where defunct web links have been amended or removed. The original abstract has been included as part of the paper. (Original Abstract:) Contrary to popular belief, under simultaneous valuation - the universal official definition of value - exploitation (surplus-labor) is neither necessary nor sufficient for profit to exist. Surplus-labour cannot therefore be the sole source of profit, if the official definition of Marx’s values is accepted. We show this, and then present an alternative interpretation of Marx's value theory - the “temporal single-system” interpretation, according to which exploitation is indeed the sole source of profit, that is, it is a necessary and sufficient condition for profit. We also show that other important “errors” attributed to Marx no longer exist under this interpretation. A universal claim of economics - that simultaneous valuation represents Marx’s own value theory - is invalidated by these two findings. All conclusions and debates concerning “Marx’s” theory that have hitherto been treated as settled must therefore be re-examined, since they apply not to Marx’s theory but to a different theory, advanced in the 20th Century in a continuous tradition passing from von Bortkiewicz, via Sweezy, Seton, Morishima, and others to Sraffa and his successors. This tradition is a valid contribution to economics, but it is illegitimate to conclude from its acknowledged defects that Marx’s own theory is erroneous, inadequate, flawed, or superseded. On the other hand, many of the most puzzling yet empirically evident features of modern capitalism are explained better than by such value categories. These include cyclic crisis as an endogenous consequence of accumulation, growing inequality between nations, the social regress which generally accompanies technical progress, and liquidity preference, re-interpreted as a dynamic consequence of value movement in a money economy. Economics’ refusal to discuss - indeed, its effective suppression of - a coherent theoretical approach which successfully interprets real-world phenomena that mainstream theory cannot account for, means that it cannot be considered a scientific discipline and its claims to authority as a source of objective truth cannot be accepted.