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Thursday, January 29, 2015


I published Understanding Marx thirty-one years ago.  In the intervening three decades, although I have of course looked at the book from time to time, I have never read it with the care I am now giving it as I prepare my lectures on it for my Marx course.  Last Wednesday and next Wednesday, I am covering the first three chapters, roughly half of the book, dealing with the theories of Adam Smith and David Ricardo.  Last week, while carefully re-reading the chapter on Smith, I discovered a mistake.  It is a small mistake, which is in fact corrected in the next paragraph, so it has no impact on the argument.  But it is a flat out mistake.  Having quoted Smith as stating that it takes Diana one day to catch a deer while it takes Orion two days to catch a beaver, I go on to say that when they meet in a clearing in the woods after two weeks of hunting, Diana is carrying five deer and Orion is carrying ten beaver.  Aaaarrrggghhh!!!!  I think it just seemed intuitively obvious to me that deer are harder to catch than beaver  [but what do I know?].  In the next paragraph, I say that after some bargaining, they agree to exchange two deer for one beaver [which is correct].  Thus is born the Labor Theory of Value.

I challenged the class to tell me where I had gone wrong, and after a few minutes one of the students correctly identified the error.  O.K.  Cute.  Shows the Professor has humility, right?

Sigh.  Today, I have been working on my lecture on Ricardo's version of the Labor Theory of Value [embodied labor and all that good stuff], preparing to go through a rather more complicated example of the calculation of prices, for which purposes I must invoke the dreaded quadratic formula of high school algebra fame.  [You all recall it, no doubt:  "x equals minus b plus or minus the square root of b squared minus four ac, all over 2a."  Sound familiar?] 

The example is designed to illustrate Ricardo's important claim that the wage and the profit rate are independent of commodity prices, a claim that is in fact true for the special case that Marx later dubbed "equal organic composition of capital."  The algebraic manipulations, although conceptually elementary, are actually a trifle complex, since one carries along terms with the wage rate, w, in them that then miraculously drop out at the end.

In my book, I did what all serious economists and mathematicians do -- I left out half of the steps, relying on the reader to supply them.  And since I wrote the book three decades ago, I had of course long since forgotten those steps.  But it occurred to me that if I were going to stand up before a class and teach this stuff, I had better reconstruct them, in case some alert student asked me to fill in the gaps.

Out came a pad and a pen, and I began.  Things did not go well, and I finally discovered that in my book, I had neglected to factor out 90 from one side of the equation when I factored it out of the other side.  Now, this is not a total disaster, because the solution I got for the equation is in fact correct.  It is merely an editing error, right?

Once, I can smile and get away with this sort of thing.  But twice?  I live in terror of what I shall find when I get to the mathematical examples of Marx's theory in the next chapter.


Chris said...

Since you're reconsidering things, can I try and sell you on the idea of the legitimacy of Marx's initial LTV ;)

Robert Paul Wolff said...

Not until you come up with a clear, precise mathemetical refutation of my argument in "A Critique and Reconstruction of Marx's Labor Theory of Value"

Chris said...

Hmm, I was never of the understanding that that is what needed to be done (i.e., the math part). My primary contention was that it was a philosophical disagreement, that led to the mathematical debate. Because Marx's argument that labor was the source of value was (supposedly) not a good argument, then speculation on alternative sources could be demonstrated via mathematics.

classtruggle said...
This comment has been removed by the author.
classtruggle said...

Sorry for the double post. Forgot to add page numbers but it seems instead of editing my last comment, I ended up deleting it.

From Ricardo's Principles, a Mini Tutorial:

"Ricardo's purpose in including the chapter is to correct a mistake of which, he says, he had previously been guilty. This in itself sets him off from the common run of theoreticians in a variety of disciplines these days, who think it a death blow ever to acknowledge that they have been mistaken" (p.20)

Excellent point and this is precisely one of the reasons why Marx praises Ricardo as the 'economist of production par excellence' and therefore the zenith of classical political economy. Marx admired Ricardo's 'scientific impartiality and love of truth' (CAPITAL or Grundrisse?) because Ricardo (like Smith before him) acknowledged that capitalism was a class society, with class conflict and the distribution of the total social product between the classes at the core of his system.

"The question at issue, Ricardo says in the first sentence of the chapter, is "the influence of machinery on the interests of the different classes of society." Take a moment to examine the phrasing of that question. I venture to suggest that there is not a single established economist in America today, including such liberal icons as Robert Reich and Paul Krugman, who could ever bring himself or herself to write a sentence in which appears the phrase "the interests of the different classes of society." Even to utter such a combination of words would be to elicit hysterical charges of "class warfare," and yet Ricardo writes the sentence with no suggestion that he intends to be provocative or to deviate from accepted norms of polite intellectual behavior. In this, as in many other ways, the mathematically sophisticated discourse of our modern professional economists exhibits a marked falling away from the understandings that the first Political Economists had achieved by the beginning of the nineteenth century" (p.20)

And of course, Marx owes much to Ricardo. The section that I have quoted above resonates in Chapter 25 in Volume One, but it appears as the organic composition of capital -- a more complex understanding than Ricardo had.

"When the market price of labour is below its natural price, the condition of the labourers is most wretched: then poverty deprives them of those comforts which custom renders absolute necessaries..."

"It is not to be understood that the natural price of labour, estimated even in food and necessaries, is absolutely fixed and constant. It varies at different times in the same country, and very materially differs in different countries. It essentially depends on the habits and customs of the people. An English labourer would consider his wages under their natural rate, and too scanty to support a family, if they enabled him to purchase no other food than potatoes, and to live in no better habitation than a mud cabin; yet these moderate demands of nature are often deemed sufficient in countries where "man's life is cheap", and his wants easily satisfied. Many of the conveniences now enjoyed in an English cottage, would have been thought luxuries at an earlier period of our history." (Ricardo, cited on p.18 )

Yes, it was passages like this that allowed the educated working classes to begin to see their place in the system of value creation. But Marx takes issue with the notion of 'natural' price -- it implied that there was such a thing and so a bit of ideology in so far as it took appearance to be essence/reality, The value of labour power is always an issue of class struggle -- it is not 'natural.'