Saturday, July 14, 2007

Marx's Labor Theory of Value for Kicks

Labor-time does not equal value in terms of wages or production price, according to Marx; he asserts that prices-–under capitalism, of course–-including wages, do not match the actual value of the labor required to produce the item/good/commodity. Mark-up, profits, and the supply-demand factors (monopoly, gluts, scarcity, consumption as a whole, etc.) compound the problem. Additionally Marx himself admits (reviewing some of the material--count me as one who thinks Capital needed like some severe editing) that he has no rough and ready conversion tables, or exchange rules, for the labor-commodity, which seems a bit strange, since he insists workers are always shorted by management/owners; he seems to rely on some objective labor-value, without being able to specify what that is, or how it is precisely measured. Thus, he seems to undermine his own argument: however, there's evidence showing that executive salaries have soared over the last few decades, while the average worker's wage has not kept pace (so is that a matter strictly of economics, or efficiency, or some putative labor-management equilibrium, Doktor Marx? or perhaps something like distributive ethics (tho' distributive ethics has nothing to do with the crypto-monarchism of some pathetic sentimental eco-phuck like Al Gore...........).

There are other problems with the LTV. Gold has a great exchange value, but that is not the end of the story, and its value is hardly measurable in labor hours (i.e Jed stumbles upon a nugget out in the hills–no real work required). That is perhaps obvious as well, but gold’s value (historically as well) really is not simply a matter of it being difficult and costly in labor hours to mine, but has something to do with status, prestige, Power…………….



Use/exchange value

Marx usually avoids "normativity": he does not prescribe; he describes. And like other economists, he has a problem defining, or quantifying, shall we say, utility, and its relation to consumption, or even supply and demand. Water and food–pure use value, right– could be far more valuable than diamonds in many “real world” situations (a drought, or war, riot, etc). Yet in a stable market, obviously the diamond’s exchange value far exceeds that of necessaries such as water.

By commodification he generally means mass production of goods (which have use value, and sometimes exchange value as well–as with precious metals), does he not; or commodification as sort of a phenomena of free-market, industrial capitalism. So commodification, supported by capital (and by labor) may result in various market imbalances –gluts, scarcity, over-under pricing, etc.–sometimes to the benefit of the owners, but not always.

An essential aspect of Marxism, then, concerns how items/goods/resources which have high use value–foods, fuels, textiles, lumber, etc.–become commodities, along with the items which have only exchange value–jewels, and really money itself, and what that mass production depends upon, or requires in terms of labor–the exploitation “factor” then somewhat provisional (tho' orthodox marxists might take issue with that). He is still somewhat mercantilist–even contracturalist— in the sense of suggesting that a society based on the exchange of “use value” items–items produced/grown/manufactured by the laborer/owner himself–would be preferable to that of the mass production/industry of capitalism. But instead of the pastoral dreams of a Jeffersonian contracturalist (even one who might agree to the elimination of finance/banking), Marx would have the State manage those contracts, and that’s where any self-respecting anarchist should reach for his revolver………….

Marxism and the State

From Marx’s notes to English workers:

“….leaving aside the so-called “rights” of property, I assert that the economical development of society, the increase and concentration of people, the very circumstances that compel the capitalist farmer to apply to agriculture collective and organised labour, and to have recourse to machinery and similar contrivances, will more and more render the nationalisation of land a “Social Necessity”, against which no amount of talk about the rights of property can be of any avail. The imperative wants of society will and must be satisfied, changes dictated by social necessity will work their own way, and sooner or later adapt legislation to their interests.”"”

Lenin develops this idea in State and Revolution, making numerous references to M & E. I am not saying it’s prima facie incorrect, but at least call a spade a spade. Marx’s somewhat “agrarian” aspects are among the more cogent sections of his theories, if somewhat utopian.

A few sentences later:

“”National centralisation of the means of production will become the national basis of a society composed of associations of free and equal producers, carrying on the social business on a common and rational plan.”"

Centralization seems fairly close to what one might call statism–or maybe not. Marx offers his lengthy diagnosis of capitalism (from a historical and economic perspective), and then offers a cure. Neither diagnosis (the labor theory of value, really—which is not some immutable law) nor cure should be accepted as dogma, though I believe he was a better diagnostician than healer. Class struggle as dialectic itself presents all sorts of problems. And looking at value as defined strictly by the cost of production (iddn’t that orthodox marxism?) presents problems. Ditchdiggers work a lot harder than do civil engineers, yet most humans would say the guy working out the load bearing equations etc. does perform work, and really does something more valuable–even in “social” terms–than the guys collecting the stone (or refining it into steel, etc.) . How does one quantify the value of different types of work, whether intellectual or laboring? I’m not really sure, but making some assumption of the equality of all work (or workers) is not merely utopian, but naivete of the highest sort (I think Keynes thought that as well). Yes, take down the barons, the financiers, the aristocrats (or wannabe-aristocrat scum like George Martini), the theocratic frauds, executives, etc. but even in New Harmony, doctors should earn more than nurses; teachers more than custodians.

The quoted essay (and others) indicates that Marx was advocating the nationalization of the means of production, in regards to property, agriculture, manufacturing. I don’t think he’s thinking of stalinist 5 year plans, but it’s still a type of statism.

I’m not sure we are now chatting about diagnosis, or cure, however. A nasty statist bureaucracy co-exists with the corporate and financial powers in many parts of America, doesn’t it. Imagine a kinder, gentler Maoism where the Peoples work the fields for part of the day, and then a bit of factory or technical work, and later something like piano practice, etc… Of course that happens (if it happens at all) after churches have been burnt down, the great financiers, industrialists, technological barons are all arrested, etc. (tho’ not killed, but like given meds and sentenced to some pleasant re-education camps) and “marriage” has been made illegal, and womenfolk work alongside the menfolk. Si Se Puede! VIL himself wrote some interesting things on womens’ lib., and a requirement that females enter the workforce.


Labor as Cost of Production

Marx does not offer any magic formula for quantifying the cost of production, for converting various sorts of the labor-commodity into “real” value. So invoking Capital as authoritative misses the point: few “real” economists take the a labor theory of value seriously , at least as specified by Marx. 8 hours of making sofas = how many bags of potatoes, or apples, oats, or fuel, lumber, etc? What about 8 hours of writing java code, or writing in French? Who decides on the various exchanges (or wages, prices, bartering-rules), even in a socialist economy? Utility creeps in, at all stages. The labor theory of value in many cases seems correctly applied, but it is not a precisely defined equation or formula, nor is exploitation. At some point economic problems, problems of distribution, property, division of labor relate to something like “ethics.”

Socialists often seem to think that if workers merely take in higher wages (so that the mysterious labor-value equals what they are “supposed” to be paid–whatever that is—instead of the market wage/price), and are made owners (at least in part), then everything is cool, and the technostructure remains intact. The problem of defining “socially necessary” labor remains mostly untouched, nor is there any real substantive critique of corporations, finance, management, urbanity. A socialized or publicly-owned petroleum “business” might be better for the refinery workers than capitalist petroleum business, but it’s still a racket, destructive to the environment, requiring all sorts of skilled labor, technology etc. It seems a bit naive and reductionist to think that simply making the workers owners, or conversely, requiring management to do some labor, “fixes” things (and the marxist “fix” again usually begs certain ethical questions, however much some some comrades fancy those crypto-Hegelian abstractions of value, commodity, etc.). Perhaps others might experience certain Humean doubts as well while reading econometrics, whether traditional econ. or marxista—as in who the F. cares, even about some supposed equilibrium or efficiency. For some of us, just having a few bright progressives in the CA Assembly (or House, etc.) arguing for higher capital gains and property taxes would be a big step in the right direction; the worker’s paradise can wait.

Deutsch Uebung:

""""Erstens: da im folgenden Satz die „äußeren Mittel zur Befriedigung seiner Bedürfnisse“ oder „äußeren Güter“ sich verwandeln in „Dinge der Außenwelt“, so erhält dadurch das erste eingeschachtelte Verhältnis folgende Gestalt: der Mensch steht im Verhältnis zu Dingen der Außenwelt als Mittel zur Befriedigung seiner Bedürfnisse.

"""First, in the next sentence, the outer things that satisfy his needs, or outer goods, that transform into things in the outer-world, and obtains thereby the first ----??--- relation in the following form: men remain in relation to the things of the outer-world as a means of satisfying their needs...............""""" (phuck)

Aber die Menschen beginnen keineswegs damit, „in diesem theoretischen Verhältnis zu Dingen der Außenwelt zu stehen“. Sie fangen, wie jedes Tier, damit an, zu essen, zu trinken etc., also nicht in einem Verhältnis zu „stehen“, sondern sich aktiv zu verhalten, sich gewisser Dinge der Außenwelt zu bemächtigen durch die Tat, und so ihr Bedürfnis zu befriedigen. (Sie beginnen also mit der Produktion.) Durch die Wiederholung dieses Prozesses prägt sich die Eigenschaft dieser Dinge, ihre „Bedürfnisse zu befriedigen“, ihrem Hirn ein, die Menschen wie Tiere lernen auch „theoretisch“ die äußern Dinge, die zur Befriedigung ihrer Bedürfnisse dienen, vor allen andern unterscheiden. Auf gewissem Grad der Fortentwicklung, nachdem unterdes auch ihre Bedürfnisse und die Tätigkeiten, wodurch sie befriedigt werden, sich vermehrt und weiterentwickelt haben, werden sie auch bei der ganzen Klasse diese erfahrungsmäßig von der übrigen Außenwelt unterschiednen Dinge sprachlich taufen. Dies tritt notwendig ein, da sie im Produktionsprozeß—i.e. Aneignungsprozeß dieser Dinge—fortdauernd in einem werktätigen Umgang unter sich und mit diesen Dingen stehn und bald auch im Kampf mit andern um diese Dinge zu ringen haben. Aber diese sprachliche Bezeichnung drückt durchaus nur aus als Vorstellung, was wiederholte Bestätigung zur Erfahrung gemacht hat, nämlich daß den in einem gewissen gesellschaftlichen Zusammenhang bereits lebenden Menschen (dies der Sprache wegen notwendige Voraussetzung) gewisse äußere Dinge zur Befriedigung ihrer Bedürfnisse dienen. Die Menschen legen diesen Dingen nur einen besondern (generic) Namen bei, weil sie bereits wissen, daß dieselben zur Befriedigung ihrer Bedürfnisse dienen, weil sie ihrer durch mehr oder minder oft wiederholte Tätigkeit habhaft zu werden und sie daher auch in ihrem Besitz zu erhalten suchen; sie nennen sie vielleicht „Gut“ oder sonst etwas, was ausdrückt, daß sie praktisch diese Dinge gebrauchen, daß diese Dinge ihnen nützlich, und geben dem Ding diesen Nützlichkeitscharakter als von ihm besessen, obgleich es einem Schaf schwerlich als eine seiner „nützlichen“ Eigenschaften vorkäme, daß es vom Menschen eßbar ist."""""

(gut gluck)

Perhaps there are other independent thinkers in blog land who sense that KM over-complicated things, rather egregiously: the endless discussion of exchange/use value, the commodity, pricing, labor, production etc. often seems to overlook distribution. Hobbes, 200 years BC (Before Capital) more or less posits equitable distribution–of goods, property, work— as one of his givens—really quite a socialist assumption. That may have been sort of a token offering, but one could, it seems, work from various distributive sorts of assumptions, and produce a rather sophisticated, and even quantitative critique of capitalism–without lapsing into some Proudhon-like utopianism. Much of anti-capitalist but non-marxist writing (such as Galbraith, and even Keynes to an extent) relates more to distribution—than to the problems of production and value. For physicalists–and Hobbes himself obviously physicalist—any values, even relating to work, exchange, wages, property etc. would be negotiated, with an eye to “just” distribution. And ultimately exploitation, whatever form it takes, relates to unequal distribution, more than to problems of exchange or utility. Not real fancy ( Marx’s Hegelian roots should always be held suspect anyways. Looking at those byzantine discussions on Die Waren again I detect Hegel’s ghost).

The labor theory of value could be, arguably, the “essence” of Marx: and not the worst concept to proceed from, even with the above-mentioned flaws. The LTV should be read as a type of empiricism–even British Empiricism—in essence. Marx is responding of course to Smith and Ricardo, offering his update of Ricardo’s LTV (even Locke had discussed a form of the LTV as well). So a real issue remains regarding whether say Ricardo’s version of the LTV (or other more “traditional” economists) is a more accurate model than that of Marx (or other radicals). I don’t always understand the distinction—-Ricardo DOES seem sort of correct that the price of labor would relate to the cost of production; it becomes a matter of which side you are looking at. Management tends to see labor as a liability (which is of course often wrong, exploitative, etc), while the worker feels he is being ripped off—though many workers will do well without working for a company as a wage slave, or they operate as an independent contractor etc. Which is to say, if plumbers, electricians, computer programmers, etc. (proletariat, right) are doing well (and in many places they are), then reforms have worked; Marxism does seems a bit antiquated in some regards to skilled/technical labor: though may be somewhat relevant to unskilled/peasants (say the people who assemble Apple computers in Brazil for a few bucks a day, on NIke shoes in the phillipines, or clothes in the LA garment district for that matter).

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