Marx's argument is, that the exchangeability of reproducible commodities with recognition of their relative values is enabled by the common factor that all of them are products of social labour (co-operative human labour producing things for others). His critics however suggest that Marx's observations about commodity trade fail to provide any definite proof that human labour-time (work effort) is the real substance of the value of commodities. It is not self-evident, that commodities are commensurable in exchange because they are all labour products; one could just as well argue, that they are commensurable in exchange because they are all priced in units of money (which is what
Aristotle did in his
Nicomachean Ethics). And if that is the case, it seems that the whole analysis of the form of value is redundant and pointless.
Marx's own response In a famous letter from Marx to
Ludwig Kugelmann dated 11 July 1868, Marx became extremely indignant and derisive about this objection, stating among other things that:
Modern value-form debate In 1989,
Simon Clarke captured the essence of the modern value-form debate within Western Marxism, as a hyper-abstract scholastic debate about the form and content of economic value: The unresolved issue, David Kristjanson-Gural commented, is that "If exchange effects the reduction of concrete to abstract labor, then the magnitude of value is determined not by the expenditure of labor in production, but only in exchange." Although Rubin did refer to "a quantitative determination of abstract labor before the act of exchange and independent of it", by his own definition he lacked any method for determining the magnitude of abstract labour prior to exchange, or for showing how it might influence product-values. Paradoxically, it seemed that if value itself can only be determined with reference to exchange ratios in markets, then value
cannot be the sole determinant of prices (a conclusion already reached by
Joan Robinson in 1950.) • The Rubin-followers generally abandoned any attempt to provide quantitative measures of value, being content with qualitative and theoretical discussion about social forms, fetishism, Hegelian dialectics, the value abstraction, etc. • The value-form theorists claimed, that value can only be expressed by money, and that value in a labour economy cannot exist prior to exchange (trade). In that case, the purpose of value theory is about (re-)interpreting the
social meaning of market phenomena in a Hegelian philosophical way, and not with measuring the magnitudes of value. • Some Marxists argued, that Marx's theory of value is only intended to explain the macro-level, and is not applicable to the micro-level of the economy. • Some Marxists argued, that since money simply represents abstract labour or a claim on labour, money-quantities can be converted into labour equivalents according to some formula (by relating labour-inputs and material inputs to corresponding output-prices), enabling a comparison of product-values and product-prices, and a demonstration of how value is redistributed by the market. Different techniques have been proposed for the conversion. • There are also Marx-scholars, such as Guglielmo Carchedi, who try to combine a dialectical and econometric approach to understanding the forms of value. Contemporary Marxian academic research in "value theory" has become a broad area. In 2018, Riccardo Bellofiore, an Italian Marxist economist, concluded from his own perspective that Marx's value theory has "multiple meanings". This can cause extra confusion, because what one Marxist means by "value theory" may not be what another Marxist means by value theory. Nevertheless,
Ben Fine and
Alfredo Saad-Filho, commenting on contemporary Marxist economics, say that: The old Marxist theory was held together by the philosophy of
dialectical materialism, but in the new academic Marxism of the West, "value theory" is said to be the unifying factor. The unresolved issue then is, whether value theory really
can be the unifying factor, if there are a large number of different and competing Marxist interpretations of value, with many different flavors, tastes and preferences, and pitched at many different levels of academic abstraction. Already in 1951, when he had tried to create firm conceptual foundations for value studies, the anthropologist
Clyde Kluckhohn concluded that the task was exceedingly difficult, if not an impossible venture:
Historical specificity and generality A "sub-theme" of this academic controversy concerns the issue of whether concepts like
abstract labour or the value-form are "historically specific" categories or "transhistorical" categories. For example, Massimo de Angelis and Christopher J. Arthur claim that
abstract labour is a "specifically capitalist category", which has no transhistorical validity in different modes of production. According to
Karl Korsch's "principle of historical specification", "Marx comprehends all things social in terms of a definite historical epoch." Marx himself said that the abstract category of labour ("labour in general", or "labour as such", i.e. labour considered with indifference to its particular forms) expresses "an immeasurably ancient relation valid in all forms of society" (or "an ancient relation existing in all forms of society"); but, he went on to say,
only in modern bourgeois society (as exemplified e.g. by the United States) is this category
fully realized in practice. Because only there does a system of price-equations exist within a universal market, which can really and practically reduce the valuation of
all forms and quantities of labour uniformly to sums of money, so that any kind of labour becomes an interchangeable, tradeable good or "input" with a known price tag - and is also practically
treated as such. In other words, abstract labour for Marx was not a fixed, immutable and static category, which fell out of the air one day circa 1750, but an
historically evolving category. If each social category was uniquely and exclusively applicable to only one specific stage of history, it would be impossible to understand the transition from one historical stage to another stage, or to understand human progress through different epochs. Marx does not say that trans-historical categories are not valid, but instead that historical categories which are applicable only to a particular epoch in human history should not be generalized or eternalized, "as if" they are everlasting trans-historical realities. Phenomena ought to be understood in their appropriate specificity, for the sake of valid generalizations. If, conversely, current transitory realities are treated as eternal in the imagination, it appears as if they are immutable and cannot change anymore (a conservative ideology), but that overlooks the very things which
are changing. This leads to the confusion of
analytical constants and variables, with constants and variables
in the real world (ultimately, almost nothing in the universe stays constant, although for humans there are constants "for all intents and purposes"). Long before commercial trade emerged, when subsistence hunters, gatherers and farmers had to judge how much time and work it would take to obtain food, they were already compelled to think abstractly and value the allocation of their labour time – giving rise to the first numerical expressions. They had count and compare to survive, because their time and resources were limited, though obviously their valuations differed from the capitalist methods and concepts in use today. Even if they were
not aware of the necessary proportions for the allocation of labour time by the clan, tribe, community etc., they were certainly confronted with its effects. Namely, if they did it wrong, their own people died. So they learnt soon enough from experience, to avoid all the worst mis-allocations of labour - they wanted to stay alive, and prosper. Modern research provides evidence that some animals, too, exhibit at least a rudimentary ability for numerical abstraction and a sense of numerical proportion, suggesting it is necessary for survival. In this sense, Marx comments that: "Value", Marx said, "does not have its description branded on its forehead: it rather transforms every product into a social hieroglyphic. Later on, men try to decipher the hieroglyphic, to get behind the secret of their own social product..." Thus, for example, archaeologist
Marc Van de Mieroop comments about the
Sumerian economy of ancient
Mesopotamia as follows: On the basis of their input/output and labour accounting, the Sumerian accountants, particularly from the
Ur III period, were evidently able to estimate, in quantitatively accurate terms, how much labour it would take to produce a certain quantity of output, and therefore how many workers were needed for a given interval of time. According to archaeologist Robert K. Englund, "The concept of value equivalency was a secure element in Babylonian accounting by at least the time of the sales contracts of the ED IIIa (Fara) period, c. 2600 BC"; the formation and use of grain product equivalencies was "an important step in the direction of general value equivalencies, best attested for in the Ur III period for silver, but then still generally applicable for other commodities such as grain or fish, including finally also labor time." Labour historian Jan Lucassen states that the first
wages were paid to soldiers employed by early states 5,000 years ago, the first
labour markets emerged between 2,000 and 1,000 BC (when temple officials began to subcontract labour), and waged workers were being paid with
coins since about 600 BC. Already 2,000 years ago, hired workers could be paid for a specific part of a working day with coin. The significance of such historical and archaeological data about the evolution of abstract labour and value is denied by many Marxists, because, according to their idea of "historical specificity", capitalism is capitalism only if there is capitalism, and value is exclusively a creation of capitalism.
Rubin Since 1972, when
Isaac Rubin's 1923 book was republished in translation, the Western Marxist value-form controversy has continued for nearly half a century. Different schools of thought have emerged, without however reaching a definite solution amenable to all. However, in reality, the intellectual controversy has much deeper historical roots. As Rubin himself stated, "All post-Ricardian political economy revolved around the question of the relation between
production price and
labor-value. Answering this question was an historic task for economic thought. In Marx's view, the particular merit of his theory of value was that it gave a solution to this problem." Rubin's claim was that, in Marx's view, the
labor theory of value and the
theory of production prices represent "two logical stages or degrees of abstraction from the same economic phenomena" instead of being two models that contradict each other. The next problem however was, that Rubin's vague "levels of abstraction" interpretation never clarified what
exactly this means in
verifiable and
quantifiable scientific terms. And therefore, critics argue, Rubin's alleged "solution" is no scientifically acceptable solution at all, of the problem of the relationship between production prices and labour-values—it is just a "definition".
Final concept In Marx's finished theory of value, the "value" of a commodity turns out to be the social valuation of
its average, current replacement cost in labour time (a synchronic economic reproduction cost) but this particular labour requirement turns out to be quite a different quantity than
either "labour embodied" in production (the actual worktime performed to make the commodity)
or "labour commanded" in exchange (how much worktime can be purchased, on average, for the money-price of the commodity). That is a logical consequence of Marx's theory of market value and
production prices. It remains true, however, that if we want to
estimate or
measure this average quantity empirically, as a statistic, this requires reference to money prices and price aggregates; we cannot measure average product-value, without reference to the forms in which value is expressed - in order to establish the connection between product units, prices and labour. In this respect, the input-output economics of
Wassily Leontief and
Luigi Pasinetti's econometric concept of
vertical integration have proved to be useful.
Japanese Unoist school Because of the controversy over the substance of value, the famous Japanese Marxist scholar
Kozo Uno argued in his classic
Principles of Political Economy that Marx's original argument had to be revised. In Uno's opinion, Marx had narrated the story the wrong way round, causing confusion. The arguments therefore had to be re-ordered. In the revised version, the theory of the value-form is integrated in the theory of commodity circulation, and does not refer to the substance (content) of value at all. The form and substance of value are radically separated. The substance of value as labour then becomes apparent (and is theoretically demonstrated) only in the analysis of the
production of commodities "by means of commodities" (including the commodity
labour-power). Some Western Marxists do not find this Unoist approach very satisfactory however, among other things because (1) a "form" is a form "of" something, the form that a content takes, hence form and content are not really separable, and (2) Marx claims that the formation of product values is an outcome of
both the "economy of labour-time"
and "the economy of trade" working in tandem. When a product is produced, it has a value; we can say that it requires a certain amount of labour to produce it, supply it or replace it. How much that value is, however, becomes apparent only when it is traded regularly and compared with other products.
Western value-form school From the 1970s, the so-called "value-form theorists" ("value-form school") have emphasized—influenced by
Theodor W. Adorno and the rediscovery of the writings of
Isaak Illich Rubin—the importance of Marx's value theory as a
qualitative critique—a cultural, sociological or philosophical critique of the reifications involved in capitalist commercialism.Rob Bryer stated that "The majority of Marxists today argue defensively that [Marx did not intend [his theory of value] to explain prices and rate of return on capital, but gave us only a qualitative theory of capitalist exploitation". In this way, the quantitative attack by neo-Ricardians against Marx's value theory is considered to become irrelevant. The value-form school has become very popular especially among Western Marxists who are not economists. Supporters of the "value-form school", especially in Germany and Britain, often regard Marx's theory of the form of value as proof of a radical break from all conventional economics. This implies there is little point in engaging with conventional economics, because conventional economics makes quite incompatible theoretical assumptions. Critics of the value-form school often see this intellectual tradition as an "evasive tactic", which avoids difficult quantitative problems concerning the relationship between economic value and money-prices which still need to be solved. Value-form theory as a special branch of radical theory has been popular among intellectual supporters of
Autonomism and
Anarchism, although
Antonio Negri thinks the theory is outdated now. Negri's theory is roughly the same as that of the
Financial Times journalist
John Kay, who believes that "The political and economic environment in which Marx wrote was a brief interlude in economic history." Both writers regard Marx's theory of value as outdated, although they still like to use some of Marx's rhetorics. Value-form theory is an important strand in the German
Neue Marx-Lektüre and there is also a post-Marxist
value criticism school.
Sohn-Rethel In a text which had a big influence on the scholarly discussion,
Alfred Sohn-Rethel examined the meaning and implications of Marx's concept of the forms of value in some detail. He claimed that "The formal analysis of the commodity holds the key not only to the critique of political economy, but also to the historical explanation of the conceptual mode of thinking and of the division of intellectual and manual labour, which came into existence with it." Marx had noted that by equating their products in exchange as values, people also equate the quantities of human labour ordinarily required to produce them, regardless of whether they are aware of it or not (very likely they would not—and could not—know accurately how much labour the products represent, or even where the products originated). This is a "functional effect" of the trading relationship. Sohn-Rethel calls this a "real abstraction"—it is an abstraction performed not primarily by thinking, but unintentionally by doing and participating in a system of symbolic conventions. Subsequently, the "real abstraction" is however transformed into a "conceptual abstraction" which, he argues, has very large implications for the further evolution of human thought. It then seems that
abstract labour is purely an
effect of economic exchange. Sohn-Rethel pondered the question of what holds society together, when all production is carried on by private agents acting independently of each other. He concludes, like
Friedrich Hayek, that society can in that case cohere only through "buying and selling". It then seems to follow, that "The nexus of society is established by the network of exchange
and nothing else." This idea however departs from Marx's theory since, for Marx, it is not the relations of exchange (the market transactions) that hold society together, but the
cooperative relations of production (governed by property rights), that form the economic structure of society. Part of this labour cooperation is certainly voluntary and freely chosen, but part of it is compelled by necessity since people cannot survive or prosper without it. What disappears from view in Sohn-Rethel's interpretation is that, in the production and reproduction of human life, people also need to cooperate in many ways which have nothing to do with trade (being a "market transactor" is just one role among others). Sohn-Rethel's radical idea is moreover not even very plausible, since (1) society does not simply collapse everywhere, if, in a crisis, the trading process breaks down to some large degree, and (2) at any time, the majority of the stock of objects of value in society (stored, or in use) is not being traded at all. So in reality, the "social nexus" or "social synthesis" involves at any time far more relations of cooperation than trade alone.
Moishe Postone Borrowing ideas from (among others) Patrick Murray and Derek Sayer,
Moishe Postone based his value-form interpretation on an excerpt of a footnote from Marx's
Capital, Volume I, which was in his opinion incorrectly translated by Ben Fowkes: Postone alleged that in "traditional Marxism" (such as "
Sweezy,
Mandel, and others"), the meaning of "value" and "labour" was wrongly interpreted: • Because "value" was allegedly equated with the transhistorical category of physical or material wealth, it became impossible to "analyze the historical specificity of the form of labor that constitutes value" within capitalism. Yet, such an analysis is required to understand "how the value-form structures the sphere of production as well as that of distribution." When Marx contrasts social labor and private labor, he did not mean a contrast between the transhistorical category of labor and the specifically capitalist type of labor, or a contrast of essence and appearance, but "two moments of labor in capitalism itself." Labor in capitalism is, according to Postone, "directly social" because it "acts as a socially mediating activity". An adequate analysis of capitalism is possible "only if it proceeds from an analysis of the historically specific character of labor in capitalism" Postone concludes from his story among other things that "the
law of value, then, is dynamic and cannot be understood adequately in terms of an equilibrium theory of the market" and that the movement of history "can be expressed indirectly by time as a dependent variable; as a movement of time, though, it cannot be grasped by static, abstract time".
Monetary theory of value In his initial discussion of the genesis of money, Marx makes his position quite clear: Nevertheless, there are value-form theorists who want to argue the exact opposite. The suggestion of some authors (such as Reuten/Williams) is that although Marx's alleged
labour theory of value is theoretically wrong as stated, his theory can be modified such that, rather than value being created by co-operative human labour, value and abstract labour can be regarded as effects ("social forms") created by the exchange-process itself. Simply put, the value of goods is nothing more than the money they will exchange for, from which it seems to follow, that if money does not exist, value does not exist either. This interpretation is often called the
monetary theory of value. Thus, Michael Heinrich claims that:
Fred Moseley highlights that
Michael Heinrich's central claim is that "products of labour become commodities, and commodities come to possess value,
only as a result of actual exchanges on the market.” Such an interpretation not only makes a mockery of Marx’s value theory as whole, it is also a bizarre view of what the production and trade of commodities actually involves in the real world. The Greek Marxian economist
John Milios also argues for a monetary theory of value, where "Money is the necessary form of appearance of value (and of capital) in the sense that prices constitute the only form of appearance of the value of commodities." Critics of this interpretation think that it cannot be correct, for three reasons: • Marx makes it explicit that "although price, being the exponent of the magnitude of a commodity's value, is the exponent of its exchange ratio with money, it does not follow that the exponent of this exchange-ratio is necessarily the exponent of the magnitude of the commodity's value." That is to say, prices need not express product-values accurately, or at all. • As Marx so painstakingly showed in his discussion of the development of the form of value, the value of commodities can also be expressed simply and directly in terms of a quantity of other commodities, or one referent commodity. To express a value relationship, in principle no money or prices are required at all – that is the whole point. All that is required is the expression that "
x quantity of product
y is worth
p quantity of product
q", whether
y and
q happen to be traded or not. • Milios's argument can be sustained only if, in the trade of one bundle of commodities for another (as in
counter-trade), the bundle of commodities traded is itself treated as if it is a "price". But such a "price" is obviously not a quantity of money. The point here is simply that the form of value, in its less developed state, does not require any monetary expression; counter-trade does not necessarily require any monetary referent at all, although in modern times it often does take into account the cash value of a deal. Milios conflated the money that actually changes hands with all kinds of possible computable price data for a commodity under various conditions. Effectively, he conflated the form of value with the price-form, and real prices with ideal prices. Milios implies, that only priced goods can have value, but this idea flatly contradicts Marx's theory, according to which product-values exist also quite independently from exchange (simply because products necessarily represent quantities of labour-effort). In
Capital, Volume II, the last volume that Marx drafted, Marx explicitly criticizes Samuel Bailey's mistaken belief that "commodity values cease to be comparable once they no longer actively function as exchange-values, and cannot actually be exchanged for one another". If Milios's interpretation is correct, Marx's value theory serves no good purpose—values and prices are hardly distinguishable. In all his economic manuscripts, Marx says that at best prices are the "idealized expression" of the forms of value. This view is logical; after all, prices express the quantity of money for which particular commodities will, or could, change owners. If however the idealization of the form of value as a price is
equated with the value-form itself, the whole value-form idea is itself redundant. It is a bit like saying, that the
price information about a good is the same thing as the
actual money that changes hands when the good is traded. Most people know very well what the difference is; they could hardly afford not to know it.
Value as power In various works, the Australian
phenomenologist Michael Eldred radicalizes the reading of 'form' in the value-form concept so that it becomes a socio-ontological category. According to Eldred, the phenomenon of exchange-value is substantially one of social power. Hence, money reveals itself to be the quintessential, rudimentary form of reified social power in capitalist society. The further value-forms developed during the course of the capital-analysis, starting with the capital-form and the wage-form of value, through the value-forms of ground-rent, interest, profit of enterprise, to the revenue-form of these income-sources on the surface of economic life, unfold the socio-ontological structure and movement of capitalism as a "
reified power-play". Eldred argues that such a total ontological structure of capitalist power-play can only come into view, if the whole of Marx's capital-analysis is reconstructed, not just the famous, notoriously difficult first chapter of Marx's
Capital. From a different angle,
Jonathan Nitzan and
Shimshon Bichler also depict the phenomena of economic value as
power relationships. While retaining some of the language of Marx, they however reject Marx's theory of value. The power dimension of value relationships is also prominent in
Harry Cleaver's commentary
Reading Capital Politically. This interpretation also has its critics, the main criticism being that by reducing all economic values to a matter of power, the concept of power itself becomes a nebulous idea, which explains "everything and nothing". For example, Andrew Kliman argues that Nitzan & Bichler seek to define power "in terms of market capitalization". On this view, "a market cap that is 1000 times as great as the average doesn't give the owners 1000 times as much power; it simply
is 1000 times as much power." Kliman says that "This identification of capital and power—capital as power—is certainly not correct in a literal sense." "Power", like economic value, is by no means a straightforward, simple concept. Power is often circumstantial, or dependent on a position taken or a status gained. It cannot be automatically inferred, from the position taken by participants in market trade, what kind of power they really have. Particularly in economic crises, it is often discovered that those who were thought to have a lot of power, do not really have it (leading to political crises).
Subjective and objective There are also anthropologists such as the socialist
Lawrence Krader and the anarchist
David Graeber who have argued that Marx's value categories should be modified in the light of historical and anthropological research about how human communities value objects. Ever since
Werner Sombart and
Nikolai Bukharin first argued it, Marx's theory of value has been described as a purely objective theory of value, as opposed to the subjective theory of the bourgeois economists. However, Krader argued (just like
Mikhail Tugan-Baranovsky and
Oskar R. Lange) that Marx's theory of value and the theory of utility are compatible, i.e., the one does not exclude the other; and Krader insisted that value has both objective and subjective aspects. Graeber's work was very focused on how value categories shape human lives, and the direct political effects of that. To understand and aggregate the subjective preferences that determine trading choices and economic decisions in the real world, those subjective preferences themselves have to be treated as knowable, objective and measurable data. Therefore, even a subjective theory of value cannot get away entirely from treating value also as an objective social fact. If that wasn't the case, then all economic statistics and marketing research would be invalid and useless. It follows that in the real world, all economists always have to deal with
both subjective value
and value as an objective market reality. True, Marx focused mainly on the overall objective outcomes of capitalist valuations. Individual workers and individual owners of capital could not determine what the markets were going to do, although important decisions by politicians and large corporations can strongly influence the markets. Yet that obviously did not mean, that workers and capitalists made no subjective valuations or choices at all, or that they were completely at the mercy of market forces. On this view, value cannot exist
without the presence of valuing subjects, it is just that the value of objects escapes from their control, and starts to lead a life of its own, independent from the volitions of particular individuals. Paradoxically, as Marx himself says, the more that producers become dependent on exchange, the more exchange appears to become independent of them. That is, markets can not only favour the interests of the individual, but can also work against the interests of the individual, because they have their own independent dynamics. Market movements can be quite different from what people expected or predicted, giving rise to many theories of market expectations, to fathom how trading patterns and people's expectations interact and influence each other.
More Heat than Light In his widely-read book ''More Heat than Light: Economics as Social Physics, Physics as Nature's Economics'',
Philip Mirowski examined in greater detail the theoretical conflicts between "substance" theories of value and "field" theories of value. He claims that "Marx vacillated between two mutually exclusive labor theories of value", which according to him explains "the incoherence of his attempt to solve the
transformation problem". One theory is the "embodied" labour theory of value (or crystallized labour), the other theory is a "cost" theory of value. "Crystalized labor highlights exploitation and fixes the locus of surplus generation in production; real-cost labor values obscure the generation of surplus and open up the possibility that the global magnitude of profit is altered (and hence generated) in exchange". This interpretation is essentially a version of the conventional neo-Ricardian critique, which claims there is an unbridgeable inconsistency between the value theory of
Capital, Volume I and the value theory of
Capital, Volume III. Mirowski claims that Marx, in the tradition of classical political economy, believed that "regular capitalist trades are normally trades of equivalent values" This claim is not easy to sustain, since the whole architecture of
Capital, Volume III is built upon the idea that product-values, prices of production and market prices systematically diverge from each other, and can diverge very considerably for a prolonged time – profit-making does not require that commodities trade at their values, and, as Marx himself notes at the beginning of
Capital, Volume III, good profits can be made by trading large quantities of goods quite fast below their value (the classical principle of competition). According to Ian Paul Wright, "Mirowski unfortunately misreads Marx's concept of substance."
Capital without production As the
accumulation of capital grows, more and more durable and financial assets exist
external to the sphere of production. When society becomes wealthier, the total value of the personally owned properties of individuals (assets owned by households) and public property increases, even if some people own little and others own a lot. Marx was primarily concerned with the value of newly produced commodities, but it is unclear from his theory about the
capitalist mode of production what determines the value of a growing stock of durable assets in society, a stock of assets which is neither an input nor an output of current production (except for the maintenance labour for already existing physical and financial assets). Contrary to a pernicious but popular myth, Marx only provided a theory of the
foundations of capitalist society, its characteristic mode of production. He did not provide a theory of the total economy, or a theory of the whole of bourgeois society. That is why, later on, Marxist and critical social scientists were forced to develop Marx's insights much further in many new areas. The old
reproduction schemes of
Otto Bauer,
Nikolai Bukharin,
Rosa Luxemburg,
Henryk Grossman,
Ernest Mandel and other famous Marxists all have in common, that they assume that the income obtained from the use of capital and labour is
either used up in consumption expenditure,
or re-invested in production. But this conflates the theory of the self-reproduction of the capitalist mode of production with the reproduction of capitalist society as a whole, and it conflates the accumulation of production capital with the accumulation of total social capital. Ernest Mandel partly admitted this – he stated that it was an error to think that a nation's resources are simply divided into a consumption fund and productive investment fund, with a zero-sum trade-off between them. There is also an "unproductive investment fund", which finances government administration, military spending, elite maintenance and entourage, luxuries, prestige goods, hoarded savings, speculation, tax havens etc. Hence, if austerity policies reduce the consumption fund, this does not automatically increase the productive investment fund - it might only increase the
unproductive investment fund. Inversely, Keynesian-type
pump-priming techniques (stimulus techniques) aiming to boost consumer demand, may increase
neither ordinary consumer expenditure
nor productive investments by very much, if they just enrich the administrators of the stimulus program and financial institutions, and if the extra subsidy given to citizens and organizations is in reality largely spent on paying off or rescheduling/refinancing debt. In a globalized, debt-leveraged economy, even if local consumer expenditure does rise, it does not mean automatically that local productive investment will increase also - the main effect of increased consumer spending may only be to boost imports, and not to develop the local economy. In reality, as capitalist development advances, the share of
non-productive accumulation in total accumulation keeps growing, as shown by capital market data and data on the national asset wealth for the advanced capitalist countries. This means that the overall structure of capital holdings, nationally and internationally, bears very little resemblance anymore to what that structure looked like in Marx's and Keynes's time.
Non-material goods In value theory, there is also the problem of so-called "non-material goods and services", such as intellectual property (all kinds of texts, data sets, software, designs, techniques, knowledge, inventions, information services etc.). Sometimes scholars refer to "cognitive commodities". Obviously intellectual property existed already in Marx's time, but its scope and volume was fairly small. In modern times, in which science and education have become large-scale businesses, there is a general tendency to attach a property right and a price-tag to more and more ideas, which are given precise boundaries (See
World Intellectual Property Organization). However, it remains unclear what
regulates the value of intellectual property in an economic sense. How is the value of intellectual property correctly defined and calculated? Often the prices paid for intellectual assets are not proportional to real production costs. ==Neo-Ricardian critique==