Based on our discussion on the labor theory of value against both classical political economy and modern marginalist theories I post this link to a Paul Krugman piece from the NYT Magazine earlier this year. In it you can see how he very carefully explicates the differences between the “fresh water” and “salt water” economists. Of course no one he mentions, including himself, is a labor theory of value subscriber. And this causes problems for him at the end when he needs to find the source of the current crisis (crises in general really). In essence, he runs the contradictions of the modern economists right up to the point where he should have to abandon their theories in favor of a labor theory. But he doesn’t. At that crucial moment he makes a turn into pure interiority of psychology using behavioral economics to explain things.

Of course, this merely displaces the problem of value, for Krugman cannot then explain why it is these pure individual psyches have a curiously similar way of expressing their individuality. Marx can–he says that this socialized “value” is disciplining and mediating these exchanges and views. But the behavioralists have rejected this possibility. And now the door is open to cultural values a la Weber, Parsons, and even more racist formulations about people who just don’t understand the “value” of things if there is no price attached.

Exhibit A: “According to the TPN analysis, the main actors causing the degradation of water service systems and depletion of the global water commons are inefficient and politicized (i.e. monopolistic and corrupt) governments that treat water as if it were a free natural resource. Government’s failure to price water in a way that reflects its true cost has inculcated a culture of wastefulness among the world’s populations, and as a result, water has become scarce. (As Peter Spillet, senior executive for Thames Water recently put it, without a hint of irony, ‘clearly people do not understand the value of water and they expect it to fall from the sky and not cost anything’ [Carty 2002].)” From Michael Goldman, Imperial Nature: The World Bank and Struggles for Social Justice in the Age of Globalization, pp. 242-3. Emphasis added.

I cannot think of a better example of chapter one’s explanation of the transubstantiation of a material use value into the immaterial measure of “value” brought on by commodification and measured by labor time than that explained (unwittingly) by dear Mr. Spillet.