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New Left Review I/116, July-August 1979

Erik Olin Wright

The Value Controversy and Social Research

Debates on the labour theory of value are usually waged at the most abstract levels of theoretical discourse. [*] I would like to thank Anwar Shaikh, Andrew Levine, Sam Bowles and Michael Burawoy for extremely helpful criticisms and suggestions on earlier drafts of this paper. Anwar Shaikh in particular helped to clarify and elaborate many of the underlying arguments. I would also like to thank the participants in the Class Analysis and Historical Change Program seminar in the Sociology Department, the University of Wisconsin, for providing a forum to explore these ideas and to force me to make explicit and comprehensible the issues involved. Frequently these debates are preoccupied with questions of the appropriate methodological stance toward social analysis, epistemological disputes about what it means to ‘explain’ a social process, and mathematical arguments about the merits of competing ways of formally deriving certain categories from others. Rarely are the issues posed in terms of their implications for the concrete investigations of social life in which social scientists would engage. This will be the central theme of this essay: the implications of the labour theory of value and its critiques for empirical investigation. In order to keep the discussion as focused as possible, I will organize the analysis primarily around one central aspect of the labour theory of value—its account of the determination of profits in capitalist societies. [1] The analysis will focus on the determination of the magnitude of profits rather than the rate of profit. This choice was made mainly for convenience in the exposition of certain arguments, since the use of a ratio (the rate of profits) makes the analysis somewhat more complex. None of the logic of what follows hinges on this choice, however, and with appropriate modifications the argument could be restated in terms of profit rates. (It is assumed throughout this discussion that money profits have been appropriately scaled in terms of constant money units, so that none of the arguments are affected by arbitrary changes in the numeraire) In some ways this is not the most basic issue within the debates over the labour theory of value, since analysis of the determinants of profits presupposes the debates over the relationship of embodied labour times (values) to prices of commodities. Nevertheless, since the analysis of profits plays such a central role in Marxist theory as a whole, and since it has particularly important immediate empirical implications, we will centre our discussion on this particular issue.

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