Academic journal article Atlantic Economic Journal

Theories of Value and Price in Contemporary Chinese Marxism

Academic journal article Atlantic Economic Journal

Theories of Value and Price in Contemporary Chinese Marxism

Article excerpt

I. Introduction

The last decade has witnessed a liberalization of academic debate in China. I As a result, Chinese economists have begun to question the foundations of socialist theories of value and price. It is the purpose of this paper to critically examine certain aspects of these debates.

Section II looks at the Chinese definition of socialist commodity production," which is the organizing principle of contemporary Chinese Marxist theories of value and price. Section III explores the "equal labor exchange" theories of value, which assert that planned prices ought to be proportional to the socially necessary labor time embodied in a commodity. Section IV examines the more recent "prices of production" theory of value, which asserts that prices must deviate from these labor determined values. Section V makes some critical observations about Chinese theories of value and price.

II. Socialist Commodity Production and Chinese Marxism

To Chinese economists, commodity production is a generic system in which products are generally produced for exchange and not for use. Commodity production is, therefore, a general social formation that can be sub-classified into feudalism, capitalism, and socialism, each of which [ Fan, 1980] "share [s] the same general character." Neither the motivations for the exchange of commodities nor the institutional arrangements in which such exchanges take place is relevant to the definition of commodity production.

Additionally, Chinese economists share the view that [Fan, 1980, p. 213] commodity production is characterized by the property of value, which all commodities possess." Thus, Marx's labor theory of value is thought to be generally applicable to all commodity production formations.

Labor in socialist commodity production is said to be no longer alienated and exploited. According to Fan [ 1980, p. 221]:

"Socialist commodity production reflects the

exchange of labor between workers who no

longer are subject to an exploiting class and who

can now for the first time in history possess the

products of their own labor. This is the first de - alienation of human labor..."

Labor no longer has the theoretical status of a commodity. One of Marx's conditions for worker alienation, as described in his Economic and Philosophic Manuscripts of 1844 [ Marx, 1978], is therefore eliminated because workers possess the products of their own labor. Moreover, the state enterprise sector is "owned by the whole people." This is consistent with Marx's definition of socialist property relations, which to him are an advance over both capitalist property relations and the individual property relations which precede it.

Socialist commodity production in China also means the end of egalitarianism and the pursuit of individual goals. It is based on profit seeking, which is also now officially encouraged, and competition between workers and between enterprises. Socialist commodity production today even accommodates private ownership, reserving for the state the ownership of the more "important" means of production. Socialist commodity production is, therefore, a mixed economy in terms of allowable ownership forms.

In socialist commodity production, exchange is not spontaneous and directionless. Instead, it is directed by a plan. In most contemporary Chinese interpretations, however, socialist commodity production is directed by both planning and market mechanisms. The exact mix of these two allocative mechanisms is ambiguous, in both theory and practice. The application of market mechanisms implies the decentralization of decision making power, while the application of planning mechanisms requires centralization.

The reform policies now being discussed or implemented in China reflect a tension between the desire to decentralize decision making based on competitive markets and the need to retain central control over economic development. …

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