[Note: In this post when I refer to Smith I mean John Smith, not Adam Smith.]
Smith and value
Unlike Lenin’s “Imperialism: The Highest Stage of Capitalism” and Baran and Sweezy’s “Monopoly Capital,” Smith in his “Imperialism” has set himself the task of explaining the imperialist—monopolist—phase of capitalism in terms of Marx’s theory of value and surplus value. Smith has set himself the extremely ambitious task of unifying Marx’s “Capital” with Lenin’s 1916 pamphlet. In addition, he seeks to update the Leninist theory of imperialism for the early 21st century. The logical starting point of such an ambitious undertaking is the theory of value.
John Smith, Keynes and left Keynesians on value
“The exchange-value of a commodity,” Smith writes on p. 58 of his “Imperialism,” is determined not by the subjective desires of the buyers and sellers, as both orthodox and heterodox economic theory maintains, but by how much effort it took to make it.” Smith makes an important point here. Both orthodox economists (the so-called neoclassical school and the Austrian school) and heterodox economists (left Keynesians) support or at least do not challenge the marginalist theory of value, which for more the century has dominated academic economic orthodoxy.
The marginalist theory of value holds that value arises from the scarcity of useful objects, which may be products of either human labor or nature, relative to subjective human needs. Instead of beginning with production and labor, as both the classical school and Marx did, marginalists begin with the subjective valuations of the consumer.