The following is a letter to the editor written by Joshua Clover and Jasper Bernes in response to Michael Clune's article in LARB, "What Was Neoliberalism?" 

Michael Clune's response to the letter can be found immediately below it.

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A Response to Michael W. Clune's "What Was Neoliberalism?"

by Joshua Clover and Jasper Bernes

MICHAEL CLUNE'S approving review of Daniel Stedman Jones’s Masters of the Universe is concerned with laying to rest some “zombie ideas” of economics, so it seems pertinent to note the obvious examples in his own account. The most arrant zombie is this: “Mike Beggs, for example, has recently argued [in his Jacobin article ‘Zombie Marx’] that the Marxist economics many on the left continue to find attractive has a fatal flaw. Marx believed in the labor theory of value, the idea that a commodity’s value is equal to the labor that goes into it. Generations of Marxist thinkers have built on this foundation to form a picture of the way the world’s economy works.”

“The idea that a commodity’s value is equal to the labor that goes into it” is indeed a thing that many people have believed. For example, it is a thing that Adam Smith believed. In somewhat different form, it is a thing believed by David Ricardo, the other great political scientist of the Scottish Enlightenment. If only there had been someone to debunk this zombie idea, we would not be in its thrall!

Rather famously, there was. The debunking of this idea first appears in Capital. We highly encourage those who wish to hold forth on Marx’s political economy to read this well-known text; for ease of use, the damning critique of said labor theory of value is to be found in the first chapter.

To miss this is to suffer rather serious analytic consequences. Marx’s own formulation (usefully distinguished from the Ricardian “labor theory of value” by various theorists as a “value theory of labor”) holds that value is a social relation, and that the value of a commodity derives not from the time that individual laborers spent making it but from the average socially necessary labor time. This is not an esoteric insight. For example, Mike Beggs, the economist whom Clune marshals to his argument, actually understands this quite well. His article is not at all a rejection of the Marxian theory of value, nor the narration of a “fatal flaw,” but a plea to improve Marxian economics by borrowing from neoclassical theory where appropriate. Far from overturning the Marxist value theory, this would put “the critical importance of labor time […] on a firmer footing.” Clune’s use of Beggs’s article is intellectually dishonest, to say the least.

Beggs’s point seems to be that marginalist economics offers a theory of price and short-run changes in the economy, but that to understand long-run transformations one needs an understanding of labor time. This is the importance of Marx's theor...