Response to Dennis 管理员存档用（勿删）

Hi Dennis, thanks for bringing this up.  This is definitely not about energy.  But since you mentioned this here, let me give you some of my thought.

First, regarding neoclassical economics, the debate between two Cambridges pretty much destroyed the logical foundation of neoclassical economics.  Because neoclassical economics cannot establish the definition/measurement of "capital" without first knowing marginal productivity of capital; but they cannot establish the definition/measurement of marginal productivity of capital without first establishing "capital".

So neoclassical economics is involved in circular reasoning, and without a meaningful concept of capital, the rest of the system collapses.

The above is mostly theoretical.  It does not necessarily undermine one's faith in the efficiency of a market economy (ironically, it is conceivable that the entire neoclassical case for invisible hand can be reconstructed based on labor theory of value; after all, Ricardo did that)

But since then there has been lots of development among the more enlightened mainstream economists that have basically established that market failures are both devastating and universal.  This is serious, because this means, in fact, in their heart, they know the invisible hand argument is invalid.  Stiglitz came close to admit it in some interviews.

Why does it matter?  Consider the current environmental crisis.  It is conceivable that we will fail to stop climate change and the emerging climate catastrophes will bring down human civilization.  From the neoclassical perspective, this is because the market prices for fossil fuels are wrong.  Can this be corrected by government intervention?  From the neoclassical perspective, to do this, the government needs to know the correct prices and even if the government does know the correct prices, there is still the implementation problem (principal-agent problem, people will find ways to outmaneuver government, etc).  If the government does not know the correct prices or cannot implement, then we cannot correct market failures.  If, on the other hand, the government does know the correct prices and can implement, why not have socialist planning?

Compare this to socialism.  Of course one needs to be reminded of the Soviet environmental disasters.  But the Soviet environmental failures were almost nothing compared to the contemporary Chinese environmental crisis (and I need to remind people that China's current environmental crisis has happened after China's capitalist transition).  Whatever is/was their internal system, both the Soviet Union and China are a part of the capitalist world system and therefore both of them are obligated to pursue economic growth.

Although this has not happened in history, but it is definitely conceivable that a socialist economy can be structured to be based on zero or negative growth.  But this cannot be said of capitalism.

In fact the strongest economic argument against socialism is that the socialist economies did not grow rapidly enough (even though Cuba succeeded in delivering higher life expectancy than the United States and for some years Cuba was considered the only country that met the principle of sustainable development by the living planet report).  Therefore, the question is, if it turns out that capitalism cannot provide sustainability for human civilization, what social system can deliver sustainability while meeting population's basic needs?

Now, about labor theory of value.  There are two different questions here.  One has to do with the labor theory of value as a theory to explain the long-term equilibrium prices in a competitive market economy and the other has to do with what Marx called the theory of surplus value.

About the theory of surplus value, it needs to be reminded that Marx's theory of surplus value or exploitation is not moralistic but based on observed economic facts (although it could be used for moralistic purposes).  All it says is no more than this: in a capitalist economy, a workers has to work longer than the social labor time embodied in the commodities consumed by the worker himself (or the worker's family) and in this sense, the capitalist profit (surplus value) derives from the worker's surplus labor.  This is factually true.

Of course, as you said, a similar quantitative relationship can be established for other production inputs.  Say, the total energy consumed in a society will have to be greater than the energy input used for energy production (people here are of course familiar with EROEI, which has to be greater than 1 for society to function).  Based on this, one could argue that not only the workers are exploited but energy is also "exploited". 

But if one really wants to extend the concept of "exploitation" here (which I don't think makes sense), what is being "exploited" is energy BUT NOT energy owners (even less the owners of capital goods consuming energy). 

In any case, the concept of "exploitation" or surplus value has to be used in a context of social relations.  It makes sense that the workers can take over the means of production and appropriate their own surplus value (or products of their surplus labor).  But it is obviously nonsense to say that the energy input can somehow appropriate the "surplus energy" consumed in other energy consumption processes.

Finally, about the long-term equilibrium prices.  It can be easily established that in "simple commodity production" (pre-capitalist market economy, where the producers own their means of production), market prices tend to fluctuate around ratios that are in proportion to the total labor embodied in commodities (including both direct labor and indirect labor embodied in means of production).

The problem has to do with "prices of production" or the equilibrium prices in capitalism (you are probably aware that this is known as the "transformation problem" in the Marxist literature).  All the difficulty comes from the fact that in capitalism, the direct labor time ("live labor") is further divided into necessary labor (the labor time it takes for the worker to replace his value of labor power) and surplus labor.  In fact, knowing the production coefficients, a unique set of equilibrium prices and the equilibrium profit rate can be solved from a set of past labor (indirect labor), necessary labor, and surplus labor for each commodity.  Thus, a definite set of mathematical relations can be established between the prices and the labor variables (although it's no longer simple proportionality; but I think it does not matter)

Of course the Neo-Sraffians would like to emphasize that you can take any other important input (say, energy) and establish a similar set of relationship between prices and say, past energy, necessary energy, and surplus energy.  But, as I said, energy cannot be a player in social relations.

In any case, labor theory of value plays an insignificant role in modern Marxist economics (I personally still think labor theory of value is valid but it no longer provides important insights).

You will not find labor theory of value in my book.  But I hope you will still find it intellectually interesting (and a little provocative).