Unequal Exchange? Marx’ Solution to the Value Problem on the World Market

Abstract

By drawing on his critically developed labour theory of value, Marx was able to provide a satisfactory answer to the question of unequal exchange—that is, the question of how the law of value regulates exchange between two or more countries. Unlike the proponents of classical political economics, Marx drew an explicit distinction between labour, as expressed in the form of value, and the same labour, as expressed in the form of use value. This twofold character is the key to the correct analysis of magnitude of value and exchange relation. At the heart of Marx’ solution to the value problem is the concept of “socially necessary labour time”. This concept includes the average labour of a given country that is required to measure magnitude of value in relation to time. If the character of average labour differs from country to country, then the same quantity of labour time measures values that also differ from country to country. What is modified, then, is not the magnitude of value itself but labour time as a measure of value. Unlike in Ricardo’s theory, in Marx’s labour theory of value, the law of exchange also applies to international trade. As a general rule, what is exchanged are equivalents. In international trade, no country can acquire a value that is greater than the value it had before engaging in such trade. A transfer of value does not occur. Less developed countries can reproduce themselves as well without being competed out of the market by more developed nations. However, the exchange of equivalents involves unequal quantities of labour time, but this “unequal exchange” is determined by production. It is not a matter of exchange, and thus it is not a matter of exchange rates either.