How Postone’s argument reframes the so-called “transformation problem”

by Jehu

NOTE: What follows is the result of my teasing implications from Postone’s approach. I am not completely sure I am getting it all correct. Most of all, I am not sure Postone would agree with me. Add salt to taste.

It is hard to overstate the significance of what Postone has accomplished in his essay, “The Current Crisis and the Anachronism of Value”.

Not only has he stated that wage labor is anachronistic — an assertion that appears for all the world to be a priori — in the course of setting up his argument to demonstrate why wage labor becomes anachronistic, and with very little fanfare, Postone also adds a interesting twist on a question posed by Marx’s theory almost from the moment volume 3 of Capital was published:

How are labor values transformed into prices?

This, of course, is the infamous “transformation problem”, the bane of Marxist economic theory.

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Postone shows that to determine the price of a generic commodity we have to accomplish this determination in two steps: first, the value of the commodity is equal to its price. But Postone states that, in the capitalist mode of production, this identity between value and price is only true for the historically specific commodity, labor power. Value equals the price of the commodity, but only insofar as this commodity is labor power.

The category, price, like all other categories, is historically specific to the mode of production. The value of labor power — and only labor power — is the [direct] expression of the socially necessary labor time required for its production. We call the exchange value of labor power, “wages”. It follows then that the value of the historically specific commodity, labor power, is thereby immediately transformed into price when it is sold to the capitalist.

Second, Postone seems to suggest that the prices of all other capitalistically produced commodities are not the direct expression of their values as commodities, but the expression of the value of the labor power expended on their production. The value of labor power enters into the prices of the other commodities in proportion as the wages advanced by the capitalist to the worker enters into their costs of production.

The result should be that the prices of production of generic commodities do not actually reflect their specific individual socially necessary labor times, but the socially necessary labor time of the labor power expended on their production.

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This is very different than is the case in simple commodity production. In simple commodity production the value of the commodity results from the direct expenditure of labor power on production. Money does not change hands until the commodity is produced. And this money expresses the value of the produced commodity.

With capitalistic commodity production, however, the labor power is first exchanged for money, for wages — it is converted into money-prices. Then the labor power is expended directly on the production of the commodity. Before the labor power is actually expended on the production of the commodity, the value of the labor power have already been converted into prices, (the wage), but these prices expresses the values of the labor power, not the values that result from the production of the ordinary commodities. (Indeed, production has not even begun at this point.)

It follows from this that it is the values of the labor power (wages) that is expressed in the prices of ordinary commodities. While the values of ordinary commodities express the socially necessary labor time required for their production, the prices of these ordinary commodities reflect the value of the labor power consumed in their production.

Each commodity has both a price and a value, but neither necessarily equals the other.

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To put this another way, conversion of labor values into prices occurs not when the capitalistically produced commodity is finally sold in the market, but when the labor power employed in its production is sold to the capitalist. Before the labor power is actually consumed on the production of the commodity, it’s value is first converted into money-prices, (the wage), but these money-prices express the value of the labor power itself, not the commodity that result from the production of the commodity.

It follows from this that it is the value of the labor power (the wage) that is expressed in the cost price of the commodity. The value of the capitalistically produced commodity expresses the socially necessary labor time required for its production, but the price of the commodity expresses the value, socially necessary labor time, of the labor power that is consumed in its production.