DEBATE :

ON THE THEORETICAL CONSISTENCY

OF THEORIES OF SURPLUS VALUE .
A COMMENT ON SAVRAN
John Eatwell

In Theories of Surplus Value Marx identified a common theoretical structure running from Quesnay, through Smith and Ricardo, to his own work :
the attempt to construct an analysis of production and distribution
around a concept of surplus . Savran's attack (Savran, 1979) on Sraffa's
Production of Commodities is directed not at the particular form in which
Sraffa presented his analysis of surplus, but on the aspects of Sraffa's
theory which derive from this common structure . He is thus attacking
the analytical foundations of all theories of surplus value, including that
advanced by Marx .
The core of Savran's position is that it is not possible to express, as an
independent variable, either the wage or the rate of profit in a manner
which will ensure that it is consistent with the reproduction of given conditions of production . Hence a theory of value and distribution which rests
on the proposition that one of the distributional parameters is an independently given magnitude is 'theoretically inconsistent' . Savran also makes a
number of subsidiary points specifically aimed at Sraffa, claiming,, for
example, that the construction of the standard commodity is an essential
component of Sraffa's argument, ignoring Sraffa's point that it is 'a purely
auxilliary construction' (Sraffa, 1960 ; p . 31) using 'particular proportions
. . . [which] . . . may give transparency to a system and render visible what
was hidden, but . . . cannot alter its mathematical properties' (p . 23,
emphasis added) ; and that changes in the conditions of production of the
subsistence component of the wage 'cannot influence the rate of profit'
(Savran, 1979, note 7) (it should be 'may not', but we'll leave that aside)
again ignoring Sraffa's discussion this time of the problem of dividing
the wage into subsistence and super-subsistence components (Sraffa,
1960 ; pp . 9-10) . [11
I will concentrate on the main point.
Savran's attack is focussed on, the fundamental proposition of all
theories of surplus value - the proposition that in the analysis of value and

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CAPITAL & CLASS

distribution one of the distributional parameters may be taken as a datum

independent of the magnitude of social product, the other parameter and
prices .being consequentially determined . Suppose, for example, that the
real wage, expressed as the value of a unit of labour-power, is taken as
given . Competitive determination of the conditions of production, including the length of the working day, establishes the relationship between
gross and net product and the total quantity of labour employed (and
hence the value of variable capital) . We can then construct Marx's fundamental equation (Marx, 1976, pp . 320-332) :

surplus value = value of net product minus value of variable capital

But this equation would be empty of meaning if social product and the
wage were not independent (otherwise, for a given wage, the single equation would contain two uknowns, the value of social product and the
surplus value) . Thus Marx, at the beginning of his survey of theories of
surplus value, taking the real wage as the parameter, argued that
The foundation of all modern political economy, whose business is
the analysis of capitalist production, is the conception of the value of
labour-power as something fixed, as a given magnitude - as indeed it
is in practice in each particular case
where
this value of labour-power is manifested in the price of the necessary
means of subsistence, hence in a sum of definite use-values (Marx,
1969 ) p . 45 ; see also Marx 1976 ; chpts . 9, 'The rate of surplus-value'
and 17, 'Changes of magnitude in the price of labour-power in
surplus-value') .

The proposition of a given distributional parameter, given independently of social product, is prior to the issue of how the magnitudes are to
be expressed, as quantities of socially-necessary abstract labour time or as
'bundles of commodities' for example, an issue which was much debated
in the pages of the old Bulletin of the Conference of Socialist Economists .
It is also prior to the question of which distributional parameter, the wage
or the rate of profit, should be taken as given .
Yet it is the initial, fundamental, proposition to which Savran objects,
arguing that the magnitude of the independent variable may be inconsistent with the conditions of reproduction . At the formalistic level of argument adopted by Savran, he is trivially correct . If two magnitudes are
independently determined then there is no a priori reason to suppose one
to be greater or less than the other - hence all versions of the theory of
surplus-value are, in Savran's words 'inconsistent and untenable' . In
Savran's discussion of this 'inconsistency' he takes the independent
variable as either the wage expressed 'as a price' [2] or the rate of profit,
but his argument clearly applies equally well to the case of a given real
wage, and hence the target of his attack is as much Marx as Sraffa .
What Savran has clearly failed to understand is the location of the
theory of surplus-value within the context of the capitalist mode of

DEBA TE: VALUE- THEORY

157

production ; i.e. in the historical context of a specific form of social and

material reproduction . Within this context the development of the material
conditions of reproduction (the social productivity of labour), the distribution of income, and the size and content of the social product are
related to one another ; and their interactions both characterise important
aspects of the historical process, and define a viable system . But these
interactions are treated as separable from the analysis of value and distribution at each particular stage . Thus, on the determination of the value of
labour-power, Marx argued
. . . . the number and extent of his [the worker's] so-called necessary
requirements, as also the manner in which they are satisfied, are themselves products of history, and depend on the conditions in which,
and consequently on the habits and expectations with which, the class
of free workers has been formed . In contrast, therefore, with the case
of other commodities, the determination of the value of labourpower contains a historical and moral element . Nevertheless, in a
given country at a given period, the average amount of the means of
subsistence necessary for the worker is a known datum. (Marx, 1976 ;
p . 275, emphasis added) .
Similarly the development of the labour-process, the level of social
accumulation and the composition of social demand determine 'at a given
period' the level of social product. But the argument that the magnitudes
of the independent variables must be related to the real characteristics of
their historical setting is just the sort of argument which Savran airily
dismisses as merely 'plausible' .
Sraffa has, of course, wrought a radical change on the structure of the
theory of surplus-value by proposing that the rate of profit rather than the
real wage be taken as the given distributional parameter, (Sraffa, 1960 ;
p . 33) hence opening the way to a discussion of the relationships between
the independently determined profit-rate, the wage 'as a price' and prices
of production . This change is worth discussing on its merits, that is, on
the same terms as the proposition that the real wage may be taken as
given, and within the context of development of the capitalist mode of
production and the specific institutional form which the conditions of
social and material reproduction, and hence of the class-struggle, assume
in a given epoch . But the change does not alter the fundamental theoretical proposition of theories of surplus-value which Marx and Sraffa share . It
is for this reason that Savran's position may be shown to be false on the
basis of Marx's theoretical argument .
Finally, it may be noted that Savran's position is not at all new . A
similar proposition was stated, somewhat more perspicuously, more than
one hundred years ago by Jevons (1970, p . 256), Walras (1954, pp .424-425)
and Wicksell (1969, p . 205) . Commenting on an equation of the same
form as that used by Marx, Jevons argued that
A plain result also is drawn from the formula ; for we are told that if
wages rise profits must fall, and vice versa . But such a doctrine is radically fallacious, it involves the attempt to determine two unknown
quantities from one equation .

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He advances instead a theory whereby

. . . . the wages of a workingman are ultimately coincident with what
he produces, after the deduction of rent, taxes and the interest of
capital. (Jevons, 1970 ; p . 256)
i.e . the marginal productivity theory of distribution . In this theory Savran's
'problem' will never arise . Thus it is toward the neoclassical theory of
value and distribution that Savran's argument ultimately leads . Is this what
he really intended?

NOTES
The author is a Fellow of Trinity College, Cambridge .
1
These points are ably disposed of by Steedman (1979) .
2
Savran suggests that there are three ways in which the given distributional parameter may be e xpressed . a s a real-wage, as the 'wage as a
price', and the rate of profit . The notion of the 'wage as a price' is a
purely formalistic one, with no economic content, as Savran acknowledges (Savran, 1979, p . 136) . But he dismisses even conclusive economic
argument, such as that advanced on this point by Sraffa (1960, p . 33), as
being merely 'plausible' . Arguments concerning the impossibility of negative prices or negative outputs would, presumably, suffer the same fate .
(Lest it should be thought that I am attacking a straw-man, it should be
noted that Savran (1979, note 13) suggests that interest may exceed the
value of social net product, a condition possible only if wages are negative.) It is perhaps worth emphasising that although Sraffa discusses at
length the relationship between the wage 'as a price' and the rate of
profit, he does so in the context of the rate of profit being the independent variable . Sraffa argues explicitly that the independent variable can
be only either the real wage or the rate of profit .

REFERENCES
Jevons, W .S ., 1970, The Theory of Political Economy, Harmondsworth,
Penguin .
Marx, K ., 1976, Capital I ., Harmondsworth, Penguin .
Marx, K ., 1969, Theories of Surplus Value I ., London, Lawrence and Wishart .
Savran, S ., 1979, On the theoretical consistency of Sraffa's economics .
Capital and Class, 7 .
Sraffa, P ., 1960, Production of Commodities by Means of Commodities,
Cambridge, CUP.
Steedman, I ., 1979, On an alleged inconsistency in Sraffa's economics,
Capital and Class, 9 .
Walras, L ., 1954, Elements of Pure Economics, Homewood, Ill, Irwin .
Wicksell, K ., 1969, Selected Papers on Economic Theory, New York, Kelley .