Michael Clune's response to the letter can be found immediately below it.
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 theory of value: it offers an account of the directional movement of capitalist economies, of the drive toward greater machine-intensive productivity, of the consequent generation of surplus populations at a global level, and of why capitalist economies enter into systemic crises in ways far beyond the real business cycle fluctuations — all significant features of the present situation, rather than mere shadows of some bygone era we might now bid farewell.
This is not to say that Marx’s value theory has itself escaped debate. Indeed, there is a serious body of work on the topic, of which the review seems notably ignorant — a disregard which becomes significant at the moment when the debate is taken to have been “decisively disproved over a century ago,” a reference (we can only presume, given the cavalier citation) to an essay by Ladislaus Bortkiewicz, or perhaps Eugen Böhm von Bawerk. To actually reject the value theory, Clune would need to look at this corpus, from those who suggested that the critique is only a problem if you assume that the value of inputs and outputs is determined simultaneously, to those who offer that the larger theory is best understood as a social logic, rather than a math problem, and so on. But let us imagine for a moment a world in which the value theory had been rejected. Far from constituting the tragic flaw of the left, this would affect many Marxist accounts very little. Some of the most well-known recent Marxist accounts of capitalism — by Giovanni Arrighi, Robert Brenner, or Silvia Federici — do not depend on Marx’s value theory in the slightest. We can only conclude that Clune has no knowledge of this field, nor any interest in acquiring it.
Indeed, one wonders if he has even read David Harvey, whom he holds up as a foil to Stedman Jones. Far from giving an account of a conspiratorial “master plan” or the unleashing of the “natural interests” of capital, Harvey examines the contingent, experimental responses by capitalists and states to the crisis of the 1970s, as does Stedman Jones. Though Harvey and Stedman Jones would certainly disagree on the causes of the crisis, as well as the meaning and impact of the solutions devised (including the purposes of monetarism — though both would uphold its importance), a reading of any of Harvey’s works will show that he does not think “neoliberalism” either conspiracy or expression of capitalist essence, but rather a historically determined manifestation. As both authors note, capitalism enters broad crisis in the early 1970s. Keynesianism stops working. Given entities, from individual firms to financial industries to vast state and interstate institutions like the Fed and the IMF, assay variegated non-Keynesian tactics to overcome, defer, or displace the problems immediately before them — sometimes nominally for the greater good of “the economy,” sometimes in evident self-interest, often enough with the former fronting for the latter. This colloquy of emergent tactics comes to be understood as a somewhat coherent strategy, which has been given the name “neoliberalism.” This broad understanding is common enough. Indeed, one would be hard-pressed indeed to find any scholar or economic thinker who resembles the conspiratorialist conjured herein.
So what then is the difference that makes a difference? Clune’s account of Stedman Jones falls notably silent regarding the question of why, really, that crisis burst forth — there is mention of “a series of political and economic shocks that began in the 1970s” but not much explanation of why, and the occasional confounding of causes and effects. If only there was some kind of economic theory that could actually narrate the tendency of capitalist economies toward systemic crisis …
A Response to Joshua Clover and Jasper Bernes
by Michael W. Clune
APPARENTLY ZOMBIES dislike being called zombies. They disagree. They object. To prove they are alive, they cite a book they have read. And yet we find, as we examine their response closely, that their disagreements, objections, and citations amount in the end to a single, repeated declaration: we are zombies.
“Zombie,” in this context, is a technical term. So first let’s look at the definition provided by an authority Clover and Bernes accept. Mike Beggs defines an economic zombie as a discredited idea that no longer illuminates the world in which we live, but that some people continue to believe. The host of the zombie idea — who I will call, for simplicity’s sake, a zombie — suffers from a kind of “scholasticism […] the need to ground everything in a 140-year-old text.” Beggs’s particular targets are Marxist zombies — those who believe in the absolute unrevised truth of the economic analyses of Capital — and his primary example is geographer David Harvey. By calling the intellectual processes of such people “scholastic,” Beggs refers to the zombie’s strange reluctance to bring Marx’s 19th-century text into dialogue with economic history. In surveying the complex 21st-century economy, the zombie wants to know only one thing: how does this 140-year-old text explain everything I’m seeing?
The response of Clover and Bernes to my review of Stedman Jones’s book is typical of this scholasticism. They imagine that my reference to Capital’s flawed labor theory of value is the result of my not having read Capital. They imagine that when I refer to the discredited labor theory of value, I must be talking about someone else, Adam Smith maybe. They point out a key passage in Capital, in which Marx argues that “the value of a commodity derives not from the time which individual laborers spent making it but from the average socially necessary labor time.”
This is Clover and Bernes’s trump card. This is the main — practically the sole — argument they use when accusing me of “intellectual dishonesty.” They seem to believe that I simply must never have read this passage in Capital, and that its mere mention will serve me a devastating blow.
This is of course nonsense. Far from never having read the relevant passage, I have specifically addressed the question of “socially necessary labor time” in a book published two months ago (Writing Against Time, Stanford University Press, 2013, pp. 70–76). Marx’s reference to “socially necessary labor time” has always been understood simply to be part of his labor theory of value. When left economists and philosophers speak of the Marxist labor theory as discredited, and in need of radical overhaul, the passage which Clover and Bernes triumphantly display is exactly what they are referring to. Here Clover and Bernes demonstrate only their total ignorance of the history of economics.
But before rehearsing the well-known problems with Marx’s labor theory, I want to emphasize the extraordinary style of argumentation exhibited by my zombie interlocutors. They believe that the only way to disagree with a passage in Marx is not to have read it. This is what you must believe in order to think that simply citing a passage from Marx constitutes an argument. For Clover and Bernes, true disagreement with Marx is simply unimaginable. In their world, a person who has read Marx and disagrees with some part of his work is a contradiction. Theirs is a zombie world, an economic world in which there exists ultimately only one book. They accuse me of never having read Capital. Their accusation makes sense only as the statement of beings who have never read anything else.
Here are three of the best-known problems with Marx’s labor theory of value. The first two can be found in many basic reference works. (The Stanford Encyclopedia of Philosophy’s entry on Marx is a good example). First, Marx’s theory implies that labor-intensive industries will produce the most profit. This runs counter to experience. Second, the assertion that only labor can create surplus value is simply unsupported.
I take my third example from a Marxist economist who is a kind of ancestor to Beggs’s effort to create a new Marxist analysis of labor. In 1986, in his essay “New Directions in the Marxian Theory of Exploitation,” John Roemer asks a simple question: How do producers know what constitutes “socially necessary labor time?” How exactly do they determine that the time I spend making a TV in my basement is worth less than the time a worker spends making a TV in a modern factory? Roemer’s argument is that price ultimately determines “socially necessary labor time.” And if this is so, he argues, then labor cannot be the foundation of price. Rather, the Marxist analysis of labor must be augmented with the economic knowledge accumulated in the century and a half since Capital’s publication.
Now, if Clover and Bernes decide to read accounts by Marxists like Roemer and Beggs, they will be tempted to say that the work of such thinkers simply proves that Marx was right all along. But this is exactly what their work does not prove. If one believes, as many of us do, that some of Marx’s fundamental insights about capitalism retain their force, then one sees the urgency and necessity of updating Marxist thought so it is adequate to the intellectual and material challenges of a world very different from the world of the 1860s. But this means we must read some new books!
Clover and Bernes contribute nothing to this urgent task. They accuse me of being intellectually dishonest by thinking that Beggs is talking about people like them. Then they obligingly furnish me with a document that painstakingly fulfills all of Beggs’s criteria for zombiehood. Clearly, they are not intellectually dishonest. They suffer from a kind of terminal honesty. In everything they say, they cannot help but declare what it is they are.
I have one more point to make. Clover and Bernes refer only in passing to the substance of my review of Stedman Jones’s book, and then simply to say it is “approving.” This is not quite accurate. As readers will note, while I think Stedman Jones does illuminate neglected features of the rise of neoliberalism, I also think he fails to interpret the broader cultural context of that rise. In particular, he gives short shrift to the troubling ascendance of free market thinking in the west after World War II. I did not have time in my review to spell out my own sense of the reasons for that transformation. I refer interested readers to my American Literature and the Free Market (Cambridge University Press, 2010). In the conclusion to that book, I venture a large-scale analysis of the problem, drawing on Marx’s insights in his “Critique of the Gotha Program.” In my view, Marx continues to be an indispensable resource for leftist thought about the economy. Let’s save him from the zombies.