c) Thomas De Quincey [Failure to Overcome the Real Flaws in the Ricardian Standpoint]
“That he is aware of what is at issue is to be seen from this sentence:
“… all […] difficulties” of political economy “will be found reducible” [to] “this: What is the ground of exchangeable value?”([De Quincey, Dialogues of Three Templars, 1824,] p. 347.)” (p 123)
De Quincey does set out the inadequacies of the Ricardian theory, but he fails to grasp that the real problem with the theory rested not with the determination of value, which Ricardo, more or less, got right, but with the way he built the rest of his theory, and explanation of real world phenomenon, upon it. So, for example, the insistence on trying to explain the existence of an average rate of profit, whilst insisting that commodities exchange at their values led Ricardo into an irreconcilable contradiction.
“But the work is characteristic of the period in which it appeared. It shows that in political economy consistency and thinking were still taken seriously at that time.” (p 124)
Marx notes an important aspect of the Ricardian theory emphasised by de Quincey, which is that the exchange-value of a commodity “is altogether different from its value” (p 124)
De Quincey writes,
“It is quite wrong to conclude “that the real value is great because the quantity it buys is great, or small because the quantity it buys is small… If A double its value, it will not therefore command double the former quantity of B. It may do so: and it may also command five hundred times more, or five hundred times less… No man has ever denied that A by doubling its own value will command a double quantity of all things which have been stationary in value. […] But the question is whether universally, from doubling its value, A will command a double quantity…” ([Dialogues of Three Templars,] pp. 552-54 passim).” (p 124)
This is quite correct. As I have written elsewhere, this distinction between the absolute value of a product/commodity, measured in labour-time, is necessarily different to, as well as historically and logically prior to, its exchange-value, which is its relative value, i.e. its value measured in terms of some other commodity. The distinction is often not made. Lenin, for example, specifically equates value with exchange-value. But, exchange-value is only the specific historical form assumed by the Law of Value, under commodity production and exchange. Before any commodity can have an exchange-value, it must first have a value, because exchange value, as de Quincey sets out above, is only the value of one commodity expressed as a certain quantity of some other commodity. Indeed, that requires that this second commodity too must first have value, because, otherwise, there is no basis for making a comparison of the two.
If I take the metre as the measure of length, in the same way that I may take the labour-hour as the measure of value, then I might measure a swimming pool to be 25 metres in length, whereas a sports field may be 100 metres. In terms of length, I can then equate the sports field, as being the equivalent of 4 swimming pools. This is a relative measure of length, but, before I can arrive at it, both the swimming pool, and the sports field must possess the common attribute of length, i.e. extension in space-time. If I take some other swimming pool, its length may be 50 metres, in which case the relative length of the sports field is only 2 swimming pools, even though the “absolute” length of the sports field, its extension in space-time, has not changed. If I measure this "absolute" length in a common third term unit, such as a metre, then again it's clear that the length of the sports field has not changed in metres.
Similarly with value. The absolute value of a metre of linen, may be, for example, 1 hour of labour-time. It has this absolute value determined by the labour-time required for its production, whether it is a commodity exchanged for other commodities, or money, or whether it is already a product that is produced and consumed directly.
If we take something like seed, used by a farmer, which they take directly from their own grain production, it is not a commodity. They never throw it into the market, to be sold, or exchanged. That is true whether the farmer is a peasant farmer producing directly for their own consumption, or a capitalist farmer. But, this seed, nevertheless, has value in either case. All that changes where the seed is instead sold, on the market, as a commodity, is that this value becomes expressed as an exchange value, a relative value compared to other commodities, or a price where it is compared with the general commodity, money.
This is important for understanding the criticism of the Ricardian theory, by proponents of theories of subjective value, such as Bailey, and later the neoclassical economists, but also for understanding the weaknesses of these theories of subjective value themselves. Its to those ideas, as put forward by Bailey that Marx turns to next.
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