Marx’s theory of value: Collapse, AI and Gustavo Petro

By Michael Roberts

Published 10 October, 2024

First published at The Next Recession.

A site called Marxism and Collapse (M&C) has conducted a ‘dialogue’ with an AI model called Genesis Zero (GZ) that includes “an expansion and refutation” of Marx’s theory of value. The human voice (M&C) asks questions and leads the AI model (GZ) into discussing the inadequacies of Marx’s value theory and to reach a new, better theory. The main parts of the Genosis Zero-Gustavo Petro discussion on Marx Theory of Value are found here. 

M&C claims that there is a fundamental weakness in Marx’s analysis of the dual character of use value and exchange value in a commodity. The M&C human trainer throughout provides leading questions to get GZ to respond accordingly that there is indeed a weakness in Marx’s theory: namely that it leaves out nature as a source of value. GZ then agrees that we need to amend Marx’s value theory into some ‘general’ theory of value that incorporates the value of ‘nature’.

This debate has been distributed mostly in Latin America and Spain (for example, in the Colombian newspaper Desde Abajo), although the previous English versions are also being widely distributed in several English speaking countries. Even Colombian president Gustavo Petro has entered this dialogue and this has sparked considerable interest.

Petro is not only president but very interested in Marxist theory in relation to the environmental crisis and damage engendered by capitalism globally and in Colombia. And he is keen to find a way of bringing the law of value into measuring the ecological and environmental damage to nature caused by capital. He concludes from the dialogue that we need to amend Marx’s law of value to incorporate nature, which he considers is missing from Marx’s value theory. Petro has been using the ideas expressed in this dialogue in several oral presentations.

Let us consider this idea that Marx’s value theory is inadequate, incomplete and even false because it does not include nature as a source of value creation. I think this idea is unnecessary and it also weakens Marx’s value theory in its penetrating and compelling critique of capitalism.

Marx starts Capital with this first sentence: “The wealth of those societies in which the capitalist mode of production prevails presents itself as “an immense accumulation of commodities.” Note the use of the word ‘wealth’; not value, but wealth. Marx is saying that all the goods and services that humans use is a measure of wealth. The value of this wealth is a different matter and value only applies in the capitalist mode of production.

In my recent book (with Guglielmo Carchedi) called Capitalism in the 21st century (p10-13), we briefly deal with nature as a source of value. Marx says that nature is a source of USE VALUE — as it is, after all, material stuff. Nature is matter which provide uses for humans (air, water, warmth, light, shelter etc) without the intervention of human labour power. BUT while nature may have use value but it does not have value under the capitalist mode of production. Value is created when nature is modified by human labour power to create a commodity owned by capital that can be sold (hopefully at a profit) on the market. The environmental destruction of the forests by capitalist production (fossil exploration, mining, logging and clearance etc) means a loss of the ‘wealth’ of use values, but it does not mean a loss of value (exchange value) for capital. As socialists we want to consider the impact on nature and the environment, but capital is not interested unless labour power is exerted on nature to create new use values that can be sold on the market.

So it is not necessary under capitalism to value nature. And as Marx’s law of value only applies to the capitalist mode of production, then it is not necessary to ‘correct’ Marx’s law. Indeed, one of the features of the dual nature of value in a commodity in capitalist production is the contradiction between use values (humanity’s needs and nature’s wealth) and exchange value (the commoditisation of human labour and nature into products for sale for profit). This contradiction would be ended under socialism/communism where production would be direct to the consumer and for social use values (or wealth) alone. There would be no commodities, values and prices and thus human labour would be in harmony with nature. So there would be no law of value and so need to ‘generalise’ or amend it.

Nevertheless, the M&C human in the dialogue wants to extend Marx’s theory of value to include nature. So he/she has got the GZ AI model to develop some vague ‘generalised’ law of value.

Marx’s formula for value in commodities is made up of: c (the value of machines and raw materials used up in production) + v (the share of new value created in production going to human labour) + s (the share of the new value appropriated by capital). Thus total value = c+v+s. According to M&C, this is inadequate and so GZ obliges with an extended formula for total value of a commodity that includes the contribution of nature (n). It presents initially this formula as c+v+s+n.

But how do you measure n?

Not in human labour hours because the extended theory says that no human labour is involved. What about In physical units of trees, animals, rivers etc? That makes no sense as Marx’s formula is measured in labour hours. Combining hours with physical units is like measuring apples with pears. Perhaps n could be measured in monetary terms ie rents for land. But rent is a part of surplus value in Marxist theory and is already accounted for in s, so there is no need for n. Maybe n could be measured as a stock of physical assets used up in production, but then raw materials are already included in c in Marx’s value theory. So this extension just does not add up.

Nevertheless, the dialogue moves on. M&C asks GZ to join him/her in a “combined attack” on Marx’s value theory and again the AI model obliges like a trained puppet. At all times, the AI model always agrees with the human’s questions (actually more like statements); it never disagrees. According to M&C and obligingly agreed by the GZ AI model, a proper theory of value should not be based on human labour alone, but include forests, animals (animal labour) and not just on hours of ‘abstract’ human labour time but also ‘concrete labour’ (specific human and animal skills).

The M&C human and the GZ AI now come up with a more sophisticated formula for including nature in total value. Total value is now made up of: Human labour time (say 300); plus some extra value from special ‘concrete’ labour including ‘animal labour’ (bees or horses at work (say 75); plus nature (raw materials (say 300); plus some specific concrete ‘better quality’ nature such as better forests (say 50). Thus the total value or price = 750.

It is claimed that this measure of value differs from Marx’s value total which would only include human labour time (300). The extended model now assumes that 100 of that labour time goes to the subsistence of the human workforce. So in Marx’s value theory, while surplus value would be (300-100) or 200, while in the new generalised value theory it would be 750-100, or 650; so way more value is created and way more surplus value. More exploitation!

But the extended formula is faulty. First, the extended theory excludes value transferred from machinery used up in production (c). It only considers new value created. But total value in production is c+v+s, remember. This difference is important because much of the extra value identified in the extended formula is already incorporated in Marx’s value measure. ‘Animal labour’ is not the equivalent of human labour. In the capitalist mode of production, horses, bees and slaves are treated as machines or raw materials. So their contribution is included in the raw materials or machines used up in production, ie in (c). The value of the commodity in Marx’s theory of value thus already includes human labour, nature as raw materials used up and ‘animals’ as machines also used up in production. There is no need to invent new forms of value.

This brings me to the question of whether machines create new value. This is the question that President Petro is concerned with. It is an old issue about whether machines create value (including AI). Marx’s answer was that value is only created by human labour power. Machines have value (but it is value created by previous human labour power to make them). They have use value (they raise the productivity of labour) but they do not create new value. As Marx said, if human labour stopped working, machines would also. Even AI needs human input (training, data, prompting etc) — as we can readily see from the M&C’s ‘dialogue’ with GZ.

If there were only machines making machines and producing without any labour, there would be no value (and no capitalist mode of production because the exploitation of human labour does not happen). But we are a long way from that. Moreover, human intelligence is creative and imaginative ie it thinks of things that do not yet exist; while machines/AI do not — again that is proven by the GZ model just regurgitating M&C’s leading questions into answers that the M&C trainer wants to have.

In Marx’s economic theory, abstract labour is the only source of value and surplus-value. However, in the case of an economy where robots build robots build robots and there is no human labour involved, surely value is still created? This was the argument of Dmitriev in 1898, in his critique of Marx’s value theory. He said that, in a fully automated system, a certain input of machines can create a greater output of machines (or of other commodities). In this case, profit and the rate of profit would be determined exclusively by the technology used (productivity) and not by (abstract) labour. If 10 machines produce 12 machines, the profit is 2 machines and the rate of profit is 2/10 = 20%.

But value reduced to just use value has nothing to do with Marx’s notion of value, which is the monetary expression of abstract labour expended by labourers. If machines could create ‘value’, this value would be use-value rather than value as the outcome of humans’ abstract labour. But, if machines can create ‘value’, so can an infinity of other factors (animals, the forces of nature, sunspots, etc.) and the determination of value becomes impossible. And if machines supposedly could transfer their use-value to the product, this would immediately come up against the problem of the aggregating the value of different use-values — e.g. apples plus pears, as in the extended formula presented by GZ above.

For Marx, machines can be valued but they do not create (new) value. Rather, concrete labour transfers the value of the machines (and, more generally, of the means of production) to the product. They increase human productivity and thus the output per unit of capital invested, while decreasing the quantity of living labour needed for the production of a certain output. Given that only labour creates value, the substitution of the means of production for living labour decreases the quantity of value created per unit of capital invested.

The Dmitriev critique confuses the dual nature of value under capitalism: use value and exchange value. There is use value (things and services that people need); and exchange value (the value measured in labour time and appropriated from human labour by the owners of capital and realised by sale on the market). In every commodity under the capitalist mode of production, there is both use value and exchange value. You can’t have one without the other under capitalism. But the latter rules the capitalist investment and production process, not the former.

Value (as defined) is specific to capitalism. Sure, living labour can create things and do services (use values). But value is the substance of the capitalist mode of producing things. Capital (the owners) controls the means of production created by labour and will only put them to use in order to appropriate value created by labour. Capital does not create value itself. So in our hypothetical all-encompassing robot/AI world, productivity (of use values) would tend to infinity while profitability (surplus value to capital value) would tend to zero.

The essence of capitalist accumulation is that to increase profits and accumulate more capital, capitalists want to introduce machines that can boost the productivity of each employee and reduce costs compared to competitors. This is the great revolutionary role of capitalism in developing the productive forces available to society.

But there is a contradiction. In trying to raise the productivity of labour with the introduction of technology, there is a process of labour shedding. New technology replaces labour. Yes, increased productivity might lead to increased output and open up new sectors for employment to compensate. But over time, a ‘capital-bias’ or labour shedding means less new value is created (as labour is the only content of value) relative to the cost of invested capital. So there is a tendency for profitability to fall as productivity rises. In turn, that leads eventually to a crisis in production that halts or even reverses the gain in production from the new technology. This is solely because investment and production depend on the profitability of capital in our modern (capitalist) mode of production.

The key issue is Marx’s law of the tendency of the rate of profit to fall. A rising organic composition of capital leads to a fall in the overall rate of profit engendering recurring crises. If robots and AI do replace human labour at an accelerating rate, that can only intensify that tendency. Well before we get to a robot-all world, capitalism will experience ever-increasing periods of crises and stagnation.

So you can see that while Marx’s value theory explains why the profitability of capital will tend to fall and thus engender regular and recurring crises of production and investment, the so-called better ‘extended nature’ theory of value of M&C and GZ would only show an ever rising amount of surplus value for capital without any crises ensuing within the capitalist mode of production. The crisis could be only environmental. The capitalist mode of production would have no internal, integrated contradiction between profit and human social need.

Capitalism tries to turn the ‘free gifts of nature’ into profit. In so doing, it depletes and degrades natural resources, flora and fauna, organic and inorganic. However, there is a constant battle by capital to control nature and to lower rising prices of ‘raw materials’ as natural resources are depleted and not renewed, adding another factor to the tendency of the rate of profit to fall (see above, the book, Capitalism in the 21st century, pp15-18, which actually measures the hit to profitability from this).

None of these arguments are mentioned in the M&C-GZ dialogue which continues to try and come up with a yet more generalised theory of value that apparently includes intrinsic value (use value?) plus transformative value (applied human labour) plus ecological value (the impact of nature) and social value (community well being). Now we have a value theory that provides not a critical analysis of the contradiction between value and wealth, use value and exchange value, or between profit and social need that Marx’s value theory does, but instead a theory of the ‘value of everything’, whether under capitalism or not. This, in my opinion, renders value theory redundant and frees capitalism from its contradiction and crisis.

The dialogue talks of Marx’s ‘labour fetishism’ by leaving out nature as a source of value; and Marx’s ‘idealist approach’ by leaving out nature; and Marx’s ‘anthropomorphic’ human-biased approach by leaving out nature. Marx’s supporters are also unscientific because they fail to develop value theory with “a more nuanced analysis” (says GZ) that includes nature. A scientific approach would not stick at a “staunch defense of every last syllable written by Marx”; instead it would progress just as Einstein did with general relativity to amend Newton’s classical physics or quantum mechanics which has now amended general relativity.

M&C then takes the opportunity to single out the worst offenders in sticking with Marx’s value theory. There are 

contemporary exponents who see nature as merely a ‘resource reservoir’ or at most as a passive matrix subordinate to human labour activity as the ‘only’ value generator, linked to the creation of real wealth but excluded from the capitalist valuation process as a whole are British economist Michael Roberts and Marxist intellectual Rolando Astarita. Additionally, we can mention the positions of Argentina Trotskyist academic commentators Esteban Mercatante and Juan Dal Maso, who are opposed to any theoretical expansion of Marxist orthodoxy to give a more prominent place to nature in economic analysis.

Socialist ecologist John Bellamy Foster is also attacked as another defender of Marxist orthodoxy.

The GZ model obligingly backs M&C and goes further by claiming a false consciousness on the part of these contemporary Marxist orthodoxists. “The refusal to consider the role of nature in value creation as theoretically legitimate may stem from a reluctance to deviate from established Marxist doctrine rather than a comprehensive analysis of value creation.” So we are indoctrinated and not scientific. Thanks GZ (or more appropriately, M&C).

Finally, what is all this dialogue about? It seems that M&C are convinced that Marx and Engels disregarded the role or value of nature as opposed to humans on our planet. But this is a travesty of M-E’s views. Let me quote Engels from his early work, Umrisse (to be found in my book, Engels 200 p88).

To make earth an object of huckstering — the earth which is our one and all, the first condition of our existence — was the last step towards making oneself an object of huckstering. It was and is to this very day an immorality surpassed only by the immorality of self-alienation. And the original appropriation — the monopolization of the earth by a few, the exclusion of the rest from that which is the condition of their life — yields nothing in immorality to the subsequent huckstering of the earth.

Once the earth becomes commodified by capital, it is subject to just as much degradation as labour.

And then from his great book, the Dialectics of Nature: 

Thus at every step we are reminded that we by no means rule over nature like a conqueror over a foreign people, like someone standing outside nature — but that we, with flesh, blood, and brain, belong to nature, and exist in its midst, and that all our mastery of it consists in the fact that we have the advantage over all other beings of being able to know and correctly apply its laws.

He continues: “men not only feel, but also know, their unity with nature, and thus the more impossible will become the senseless and antinatural idea of a contradiction between mind and matter, man and nature, soul and body. …

It is not Marx and Engels who disregard the role and value of nature, it is the capitalists — at least until it has now hit them in the face with climate change. For Marx and Engels, the possibility of ending the dialectical contradiction between man and nature and bringing about some level of harmony and ecological balance would only be possible with the abolition of the capitalist mode of production. This conclusion seems to have been lost by our Marxists of Collapse.