2. Constituted Value or Synthetic Value
“What then is this “constituted value” which is all M. Proudhon has discovered in political economy?” (p 42)
Marx summarises Proudhon's definition of this constituted value that he claimed to have discovered.
“Once utility is admitted, labour is the source of all value. The measure of labour is time. The relative value of products is determined by the labour time required for their production. Price is the monetary expression of the relative value of a product. Finally, the constituted value of a product is purely and simply the value which is constituted by the labour time incorporated in it.” (p 42)
Not only is this not new, but it suffers all of the earlier deficiencies, in relation to the determination of value by labour-time, as Engels described in his Preface. In other words, it is a theory of embodied labour that fails to recognise the difference between complex and simple labour, concrete and abstract labour. It fails to understand socially necessary labour, or the fact that the value of commodities can change, because it is not even the abstract labour-time required for their specific production that determines their value, but the abstract labour required for their reproduction, i.e. required to produce the equivalent commodities currently.
Proudhon accuses Smith of arriving at the concept of “synthetic value” only intuitively, whilst it was left to Say to express it more clearly, on the basis of the antimony between use value and exchange-value.
“Here, in a nutshell, is the history of the discovery of synthetic value: Adam Smith – vague intuition; J. B. Say – antinomy; M. Proudhon – constituting and “constituted” truth. And let there be no mistake about it: all the other economists, from Say to Proudhon, have merely been trudging along in the rut of antimony.” (p 43)
Marx quotes Proudhon's claims in that regard.
““It is incredible that for the last 40 years so many men of sense should have fumed and fretted at such a simple idea. But no, values are compared without there being any point of comparison between them and with no unit of measurements; this, rather than embrace the revolutionary theory of equality, is what the economists of the 19th century are resolved to uphold against all comers. What will posterity say about it?" (Vol. I, p.68)” (p 43)
Posterity, Marx quips, might begin by addressing the muddled chronology of Proudhon, because Ricardo, and his school, which developed the ideas of Smith, to their ultimate level, were themselves economists of the 19th century.
““What will posterity say about it?” It will not say that M. Proudhon did not know Ricardo, for he talks about him, he talks at length about him, he keeps coming back to him, and concludes by calling his system “trash". If ever posterity does interfere, it will say perhaps that M. Proudhon, afraid of offending his readers’ Anglophobia, preferred to make himself the responsible editor of Ricardo’s ideas. In any case, it will think it very naïve that M. Proudhon should give as a "revolutionary theory of the future” what Ricardo expounded scientifically as the theory of present-day society, of bourgeois society, and that he should thus take for the solution of the antinomy between utility and exchange value what Ricardo and his school presented long before him as the scientific formula of one single side of this antinomy, that of exchange value.” (p 44)
Marx, then, quotes from Ricardo's Principles of Political Economy, where he sets out that utility, whilst essential for a commodity to have value, is neither the source nor the measure of value. The value, Ricardo says, derives from two sources, scarcity, and the labour required for production. As for scarcity, Ricardo says, this can be discounted, when considering the system of commodity production, which assumes that, for the vast majority of commodities, supply can be increased. If we consider a work of art, it is unique, and so no matter how much the price of it may rise, it is impossible to increase its supply. It is not a question of value, but of monopoly price.
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