Thirteenth note on Moseley’s “Money and Totality”

Moseley writes:

“(1) Marx’s theory is structured according to two main levels of abstraction: the production of surplus-value and the distribution of surplus-value, and the production of surplus-value is theorised prior to the distribution of surplus-value, which means that the total surplus-value in the economy as a whole is determined, logically, prior to its division into individual parts; (2) the subject of the theory throughout is a ‘single system’ – the actual capitalist economy – which is first analysed at the macro level of the total economy and is then subsequently analysed at the micro level of individual industries; (3) the logical framework of Marx’s theory of the production and distribution of surplus-value is the circuit of money capital, which is expressed symbolically as:

M – C … P… C’ – M’,

where M’ = M + ΔM and the main goal of the theory is to explain the origin and magnitude of the total ΔM in the economy as a whole; (4) the initial money capital M at the beginning of the circuit of money capital is taken as given, as initial data, both in the macro theory of the total surplus-value and in the micro theory of the individual parts of surplus-value; (5) the given initial M is eventually explained in two stages, first partially at the macro level and then more completely at the micro level; and (6) the variables in the theory are determined according to the logic of sequential determination (not simultaneous determination), in the above senses.

In this book, it will be argued that, if Marx’s logical method is interpreted in this way, then there is no ‘transformation problem’ in Marx’s theory, and that Marx’s theory of prices of production is logically coherent and complete.”

Anyone who has ever tried to explain inflation based on the premises of Marx’s labor theory of value knows immediately that the neat relation (alleged by all schools) between the value of a commodity and its price in Marx’s theory is, at the very least, highly problematic. The history of prices for the last century suggests, if anything, that the prices of commodities are inversely correlated to their values.

Thus, as the productivity of labor has increased since 1950:

United States Nonfarm Labour Productivity 1950-2018: Productivity in the United States averaged 60.17 Index Points from 1950 until 2018, reaching an all time high of 105.08 Index Points in the second quarter of 2018 and a record low of 26.03 Index Points in the first quarter of 1950.

The prices of the commodities produced by this increasingly productive labor increase with it:

United States Consumer Price Index (CPI) 1950-2018: Consumer Price Index CPI in the United States averaged 110.91 Index Points from 1950 until 2018, reaching an all time high of 251.29 Index Points in July of 2018 and a record low of 23.51 Index Points in January of 1950.


If, as Moseley suggests, Marx’s labor theory of value simply proposes that labor values of capitalistically produced commodities are expressed in their prices of production and no more, it is obvious Marx was wrong. If anything, prices of production appear to be positively correlated with labor productivity — as the socially necessary labor time required for production of a commodity falls, its price rises.

Empirical evidence seems to suggest that the alleged neat relation between labor values and money prices begins to break down almost immediately with the capitalist mode of production.