Marx's Labour Theory of Value is Superior to Subjective Value Theory

Thanks to Con for a very articulate and game-raising first post; I can see I"m going to have my work cut out for me! I"ll limit my comments on the meta-debate side of things as much as possible while still responding to Con"s remarks.Firstly, I accept Con"s conception of what the criteria should be for deciding the best theory; the theory that best explains the phenomena under consideration should come out on top. My only alteration would be in the description of the phenomenon. From the Marxian perspective, what we are trying to ascertain is not an over-arching explantion of "production, consumption and the driving force that facilitates what people buy and for how much". This is a little too wide-ranging for a Marxian analysis limiting itself to explaining value. What Marx"s value theory is aiming to explain are prices specifically, and only as a secondary objective the reverberations of the law of value in the economy at large. I think this is a useful way of limiting the discussion which also has the virtue of tapping into what most people find themselves mulling over when the question of value is raised: "how is the price (value) of something determined?"In terms of measuring the validity of each theory, we should remember that we are not dealing with a mathematical equation. All of the ideas presented here will be validated solely by the opinions of the voters having weighed up the arguments. As with any sociological question, the proof is in the plausability of the account, not in a chemical reaction. Now then, to the issue at hand!Firstly, I accept Con"s notion that the LTV/STV debate comes down to a question about the role of the human mind in determining value. I want to stress that Marx is not trying to argue that every aspect of economic activity or the nature of a commodity is objectively determined; far from it. But he is indeed arguing that what he calls value or value proper is determined independently of the vicissitudes of subjective opinion. Recall that Marx distinguishes between "use-value" and value. Use-value is the aspect of a commodity which is indeed influenced by subjective trends, and it would be a mistake to think that by use-value Marx only meant material properties. The use-value of a commodity is any useful purpose that it can serve, be that purpose industrial, mechanical, chemical or aesthetic. What ties the use-value of a thing to its material properties is the fact that certain material properies must be present in order for that thing to satisfy a given criterion of usefulness; just as a steel girder has to be strong in order to hold up buildings (its use-value), so too does a diamond have to be shiny in order to have a specific aesthetic value. Material properties are a pre-requisite of use-value; they are not synonymous with it.What Marx is contending is that use-values (in essence, subjective values) are NOT what ultimately determine prices. The subjective attitudes of consumers dynamically affect use-values and, as Marx has already pointed out, a commodity must have a use-value. But we should not take any more from this statement than that which it is strictly offering. In having a (subjectively determined) use-value and thus being permitted to enter the world of commodities, a given commodity becomes saleable, and this transportation of something from the uncertain world of mere "objects" to either the realm of useless things or that of useful commodities is ALL that use-values determine. In short, they determine whether or not something can be sold. After this fundamental determination (thanks to subjectively determined use-values in concert with objective material properties), it is left to value proper to determine the price at which that commodity will sell in the market-place.Let"s take a look at Con"s De Beers example with this in mind. Keen to sell more diamonds and thus realise more revenue, they enlist the help of a advertising agency. The agency sets to work on transforming the subjective attitudes of consumers, and is highly successful; sales increase by 55%. What is happening here from the Marxian perspective? The ad agency is transforming the use-values of diamonds, not by adjusting the material properties of diamonds themselves (which would have the same effect), but by adjusting the subjective attitudes of people towards diamonds. With diamonds now a must-have item, sales naturally increase. But an increase in sales does not equal an increase in value from the Marxian perspective. What the De Beers campaign did was allow the company to realise the value, via sale, of many more diamonds than they could before. It did not increase the value of diamonds.Perhaps now is a good time to pre-empt a common reaction against the LTV. It will probably be very difficult for people not to conclude, having heard me talking about the partly subjective character of use-values, and in conjunction with Con"s claim that "N.Y. Ayer successfully managed to create a unique, subjective value in the minds of many", that we are actually in agreement about the subjective nature of value. Part of the problem arises from the polyvalency of the word "value" itself. When we hear, during an election season, that some critical battle is being fought on the basis of "values" (conservative Christian vs secular liberal values etc), the word "value" is obviously being used in a very different sense to the way Marx used it. Values of this kind are indeed subjective, and it is not in any way Marx"s goal to argue that there are no subjective values, or that labour-times somehow account for people"s opinions. All that Marx is saying is that subjective opinions (values) do not account for prices any more than people"s religious or political values do. The sense in which Marx is using the word value is completely restricted to the sense in which it denotes the differential prices commodities fetch in the market place; these alone are what are accounted for by labour-times.So, on to the question of shifts in prices due to factors other than changes in socially necessary labour times. It is not true, as far as I am aware, that marketing alone can significantly alter prices, although it can certainly influence sales, and thus the realisation of value. The story is different with supply and demand. Marx"s view of supply and demand is that the two terms do explain quite a lot. They explain why prices may, at a given moment, have shifted temporarily above or below, "natural" or "equilibrium" prices. If supply rises steeply relative to demand, due to, say, demand falling off sharply for cultural reasons, prices will indeed fall. Conversely, if demand rises sharply relative to supply, prices will rise. Supply and demand, for Marx, are adequate explanations for these temporary fluctuations around equilibrium prices; what they do not explain, however, are the equilibrium prices themselves in money terms, or why the equilibrium price of one commodity differs from the equilibrium price of another. Equilibrium prices themselves can only be explained by the differences between average labour times between different products. Moreover, market forces (movements of capital into industries with higher returns on investment) flatten massive spikes in supply and fill in the troughs, causing prices to stablise over time in close orbit of equilibrium prices (labour-time values). Prices, then, are not synonymous with values, but market forces nevertheless dictate that prices never range too far from values, and maintain a tendency towards price-value equilibrium.Now then, why is labour the common denominator of value? It is the common denominator by virtue of the fact that it is the only thing shared in common between all commodities. There are no physical, chemical, biological etc features that all commodities share in common, and since only qualitatively identical features can be quantitatively compared, the common factor of commensurability between commodities cannot be anything physical or aesthetic. Moreover, as I have stated repeatedly, value is only an intelligible conception when attributed to commodities sold on a market. The fact that all commodities contain a quantity of human labour is precisely what makes them saleable and thus into commodities. It is for this reason that no natural qualities of objects can be sources of value, since natural qualities do not, in themselves, turn objects into commodities (though they do contribute to use-value). It is for this reason that scarcity, for instance, cannot be an alternative source of objective value; nothing, scarce or plentiful, is a commodity while it simply sits in the ground or on a tree. Labour is what transforms objects from their natural, "god-given" states into commodities (by a combination of physical transformation and transportation from one place to another, usually), and thus contributes value to them.A final word on "intrinsic" value. In what sense is the LTV propounding a notion of "intrinsic" value? One consequence of the LTV is that the values of commodities can change even within the lifetime of those commodities. If I produce a car now, and it remains unsold for a number of years, I might very well find that its value has declined by the time I sell it, because in the interim the socially necessary labour time of similar qualities models has reduced. It"s original value was thus not "intrinsic" in the ordinary use of the word. It was "objective", but responsive to the fluidity of the very objective conditions that gave rise to it. I prefer, therefore, to think of the LTV as propounding a theory of objective but contingent value; objective in that it exist independently of subjective preferences, but contingent in that it responds dynamically to constantly changing objective circumstances.That being said, I look forward to the next round of a great debate!Again, all of the material from Marx can be found in Vol.1 of "Capital"