I've been lucky enough to attend two discussions on economics these last couple of days, and I'm sure they won't be the last before the month is out. First of all was our weekly Socialist Students discussion, which we billed as 'what could a socialist economy look like?' Unfortunately, most of the discussion was spent on what one wouldn't look like, which, nevertheless was quite useful.
He gave us an introduction to some of the more sophisticated market-based objections to socialism. Going back to Marx's labour theory of value (last week) this theory was disputed by Friedrich von Hayek and Ludwig von Mises in what came to be known as the economic calculation debate, and it turned on different theories of value. For Marx, though it is true the capitalists leach off the value realised by their expropriation of workers' surplus labour, it remains the case that the value of commodities is determined by the (simple) labour socially necessary for their production. Marx's critics however argued value could not be determined objectively. What counted was the usefulness of a commodity to consumers and it was this that determined value. Because value is subjective, it is impossible to set prices through any kind of economic planning. Such an agency cannot possibly know everyone's preferences, but the decentralised interplay of the market can, which is why, as far as they were concerned, the state needs to keep out of the economy. Any intervention would disrupt the delicate equilibrium and throw the whole thing into crisis.
Some of these issues have been addressed before. One interesting point came up in discussion about the ideological effects of the subjective theory of value. The labour theory of value has the advantage of simply determining the base value of any commodity at any given time, whereas marginal utility hides it behind a cloak of complexity. This confers capitalists an enormous amount of latitude on determining price. They can push price way above value or, when there is a glut, slash the price beneath it to either recoup costs and/or drive out rivals with less of a capital cushion. Price is a weapon for pursuing their material interests. Market forces and "complexity" is so much waffle to cover this.
Earlier today I attended an economics day school on the contemporary crisis. We were treated to sessions on sub prime lending, and theories of the American labour movement. Not being an economist I found them challenging to follow. But luckily they were ended by a session more suitable to a lay audience. Keith Tribe gave a talk entitled 'Marxism as a Critique of Bourgeois Economics', which was really one for Marx geeks and bibliophiles. His argument was quite simple. Back in the day when the Spiked/LM crowd traded openly as the RCP, they were said to argue one could not understand Marx's Capital unless it was read in the original German. Tribe had a different take. The 1872-5 French edition was the last revision Marx worked on that was published in his life time. What is important about it is the revision deals with material not incorporated into the translation widely available in the English-speaking world. Also, in his opinion, a 'Marxist economics' as such hasn't really been developed, which he defined as an enterprise engaging and critiquing mainstream economic theory. He approvingly cited Bukharin's 1919 book, Economic Theory of the Leisure Class, and Paul Sweezy's The Theory of Capitalist Development (1942) as examples, but that was all. As far as Tribe was concerned, a big gap in Marxist thinking needs to be filled. Perhaps we'd better start cracking then!