# Do contemporary Marxist economists still deny the utility/value theory which underpins classical economics?

Do contemporary Marxist economists still apply the labor theory of value when analysing economic phenomena? Or do they e.g. acknowledge that value (and utility) is subjective as is common knowledge in modern economics?

• Just changed the question. I believe now it follows the standard protocol. – decision maker Jan 26 '17 at 23:44
• @Tobias Obviously there are contemporary economists which call themselves marxists, cf. rethinkingmarxism.org, and Marxist economists are not necessarily "crazies", whatever that means. – AnonymousIGuess Jan 28 '17 at 20:15
• Marginalism is not a theory of value, it is a theory of prices. – Luís Henrique Mar 15 '18 at 23:54
• What is a "Marxist economist"? – nathanwww Jul 27 '18 at 13:12

Conteporary Marxist economist Richard D Wolff says on the issue (abridged):

The labor theory of value is not a theory is not a theory of prices. The prices of things is determined based on whats going on among the people buying and whats going on among those selling. Marx was not so silly...Notice this is not called the labor theory of price, so we need to know what value is.

....Marx was interested in analyzing how labor is organized in a society, (this is what the labor theory of value provides insight on) by knowing this we can understand what is happening within a society.

This is what Marx thought labor would teach us, the labor thats done produces more than he needs, A surplus. the question is now who gets that surplus.

According to Dr. Wolff The labor theory of value tells us how the product of a workers labor is divided.

Abstractly this can be thought of as:

$$p=c+v+sv$$

where $p$ is price of the good sold, $c$ is the cost of the amount of capital used in the production process for the good sold, $v$ is the amount of the price of the good good paid out to laborors , and $sv$ is the surplus value received by the capitalist (organizer of the means of production).

Based on this marxian analysis, knowledge of the rate of profit (i.e $\frac{sv}{c+v}$ ) can tell us how much a worker is being exploited (by being under cut his value).

I am not familiar with contemporary Marxist economists, but the labour theory of value as formulated in Das Kapital does not deny that the usefulness (use value, in Marx' terms) of an item is subjective. Moreover, the fact that an item is useful to someone (however this usefulness is determined by each individual subject) is a precondition for it to be exchanged on the market.

For items that are exchanged on the market (commodities) the exchange value is the ratio between the quantity of one good that is exchanged for a unit of another good. Money is a special commodity chosen by a society to measure the exchange values of all other commodities (price). Items that are not exchanged (e.g. air, or something that is produced for personal use but not sold) have no exchange value / price, however useful they may be.

The prices of commodities that are sold only occasionally (e.g. a painting) may vary considerably and are rather unpredictable. On the other hand, commodities that are produced, exchanged and consumed on a regular basis (and this is the topic of Marx' analysis) tend to have more stable prices.

According to the labour theory of value (LTV), this equilibrium price is related to the average amount of labour necessary in a given society to produce each unit of the commodity (value). The reason for this is that, if producers sell a commodity at a low price that does not reflect all the labour that went into making it, they will make no profit or even go bankrupt; on the other hand, if they try to sell at a very high price that is totally unrelated to the necessary labour, there will probably be competitors selling the same commodity at a lower price (unless there is a monopoly). This situation is different from the case of a painting, because the buyer of a painting cannot find another seller selling the exact same painting at a lower price: LTV considers equilibrium prices of reproducible commodities under a given average productivity.

Once you have a certain number of people who decide to buy a certain product (whatever personal / subjective reasons they may have) and an average productivity for that product, you can use LTV to explain certain aspects of prices. E.g. LTV would explain why a toothbrush costs less than a Boeing 747 even though the demand for toothbrushes is much higher than that for Boeing 747s by saying that the production of a toothbrush requires (much) less labour.

So, as far as I understand, even in Marx' original formulation there is no contradiction between the LTV and a subjective theory of value (use value) in that the LTV does not deny that the judgment about the usefulness of a given product is subjective.