This is a draft of a script from my upcoming video series “Law of Value”.
Simple labor- the script
Production in a capitalist society takes an atomized form, the private labors of billions of people scattered over the planet with no direct coordination between them. There is no dictator, or committee or democratic process which makes this all work. What unites these labors is the law of value. Value, acting as a basic social substance which binds together these atomized private labors, is the starting point for an understanding of the dynamics of a capitalist society in all of their stunning complexity, misery, and violence.
As we’ve previously noticed, our world contains a great diversity of labors which create a great diversity of commodities. Specific commodities require specific types of labor to create them. As we’ve seen, part of the role of supply and demand is to apportion labor between various specific jobs. This apportioning of labor in general between different specific jobs reveals a process of abstraction. We don’t just have a world of specific, private labors. These private labors are made social through a process of abstraction. Money prices abstract away from specific uses and specific concrete labors. Money prices just reflect value in general, labor in the abstract.
If we looked a little more closely at the problem we’d see that the diverse qualities of different labors (doctors, janitors, cab-drivers, construction workers) are abstracted away from to reveal their common quality: that they are human labor in general. This allows labors to be compared to each other purely in quantitative terms. We say that one person has created $20 of value, another $30. These quantitative ratios are the only economic way in which different labors are related. In a capitalist society differences in quality become expressed as differences in quantity.
If money prices measure amounts of this social substance called value, and if value is something only created by labor then what does it mean to have more or less value? more or less labor? How is labor measured. In general Marx treats labor as an expenditure of time. Elsewhere you may hear people create theories of labor based on caloric expenditure, energy, or even the subjective preferences to various kinds of work. But Marx chooses time. Why?
Labor-time is not just a theoretical simplification. It is an observation of a real process going on in the world. Perhaps if humans lived for ever it wouldn’t matter how much time we devoted to making things. But we have a limited amount of time at our disposal to create the things we need and desire. This time is precious. It has value. In a capitalist society, with its mad pursuit of increasing profits through exponential growth, the need to be as efficient as possible, to micro-manage and control labor time is an utmost priority. Scientific management, public schooling, and the automation of production all seek to reduce labor to a common expenditure of average labor time. We measure productivity in output per labor hour. We are paid in hourly wages. We work an 8-hour day and a 40-hour work week. It all has to do with time.
This is not the case with other measures of labor. There is no social process which reduces work to caloric output. There is no social process that makes a product more valuable because the worker enjoyed or despised their work.
But if value is an expression of labor-time what do we make of the differences in skill between laborers? Isn’t it a fact that an hour of a doctor’s labor produces more value than an hour of an unskilled factory worker? Marx has a solution to this puzzle. He calls an an hour of average labor “simple labor” and the work of highly trained workers “complex labor”. Complex labor counts as “multiples of simple labor.” Therefore an hour of a doctor’s labor counts as many hours of simple labor. Like any economic process in capitalism this is not a planned or conscious reduction, but a process that goes on “behind the backs of the producers.”
Though Marx devoted little if any more thought to the issue some of his critics and his admirers have devoted a considerable amount of time to it. Austrian critic Bohm-Bawerk claimed that the simple-labor problem represented a fundamentally unsolvable problem in the law of value that exposed the inherent falseness of the theory. Basically Bohm-Bawerk argues that Marx has told us that 2 commodities have the same value because they both represent the same amount of labor time. But now he tells us that different amounts of labor time can equal each other, that 1 hour of a doctor’s labor could equal 40 hours of a factory worker’s labor. Marx is contradicting himself. On top of this Marx doesn’t identify a social process by which complex labor can be reduced to simple labor.
These have remained the two basic theoretical problems associated with the Simple-labor issue: 1. How is the reduction of complex labor to simple labor theoretically justified? and 2. What is the mechanism by which this reduction takes place?
Many different defenses and criticisms have been presented over the years. Before we move on to them, we should point out four pitfalls that people sometimes fall into when thinking about the problem. Avoiding these pitfalls will not only help you understand the debate but also keep you from sounding like an idiot when you try to talk about simple-labor.
Pitfalls- watch out!
1. Simple labor isn’t the same as unskilled labor.
It’s really hard to talk about unskilled labor. Everything requires some sort of skill. Most jobs require the ability to read and speak a language. A lot of jobs require a high-school education. Workers need to be able to follow directions, keep a schedule, do simple math, etc. Capitalism creates a workforce that can do all these things mainly through the public education system. This basic, average level of skill is “Simple labor”. As production conditions and economic forces change what is required of simple-labor changes. For instance, over the last 20 years the ability to type and use computers has become an important component of what is required of all workers. The public education system has responded to this by making “computer literacy” a core part of the education system.
Complex labor is significant in that it exceeds this social average. Complex labor is labor that has additional skill on top of these basic social expectations. (This is similar to the way Marx treats intensity of labor. If a capitalist can get his workers to work more intensely than the social average, through intimidation or motivational speeches, then he can generate a profit above the social average. But if all capitalists follow suit and increase intensity then the social average itself moves.)
2. Simple labor doesn’t mean that all work is physically the same.
The establishment of simple labor doesn’t mean that different jobs lose their physical differences. But it does mean that it becomes easier to switch between jobs. In a modern capitalist society we have a degree of indifference to our occupation that the skilled artisans of the past never had. A modern worker may switch careers many times during her lifetime. This is only possible because of social processes which reduce the amount of control workers have over the labor process, making it easy to replace one worker with another. This flexibility is an essential part of a developed division of labor coordinated through markets. There must be some way of quickly moving labor between different sectors in pursuit of profits. This could never happen in a medieval guild system where workers are locked into a chosen profession for life.
3. Don’t confuse wages with the value created by workers.
This difference between the money paid to workers in wages and the actual amount of value they produce is crucial to Marx. This is the basis for his theory of exploitation. Like any other commodity, the worker has a use-value and an exchange-value. Their exchange value, or the price of their labor, is their wage. Their use-value is that their labor is used to create value. This antagonism between the exchange-value and use-value of a worker is what forms the basis of all of the antagonistic social relations of a capitalist society.
Now it’s true that skilled workers not only produce more value but that they also usually get paid higher wages. Why is this? To produce the commodity called the skilled worker society must expend a lot of energy. A skilled worker requires the labor of many teachers. She also spends years of her own time acquiring these skills. This is all socially necessary training time. When people train to become doctors and lawyers they acquire a great deal of debt. This cost passes into the price of the worker.
It’s also possible for wages to fall above or below the value of labor-power as a result of class struggle. A shortage of doctors may allow them to inflate the price of their labor above its value. An oversupply of simple laborers may depress their wages below their values.
4. The simple-complex labor issue is different than the abstract-concrete issue.
How do you compare swinging a hammer to slicing a pizza? It can’t be done if the focus is on the concrete qualities of the labor. This comparison only makes sense in the abstract. The first thing that happens in a market society is that the market abstracts from the concrete forms of labor and assigns value based on labor in the abstract. The comparison of simple labor to complex labor is one that compares difference qualities of work: doctors to factory workers, computer programmers to janitors. But before we can do this we must realize that society already abstracts away from qualitative differences when it assigns prices to commodities. Qualitative differences become quantitative differences.
With this last point the problem is mostly already solved. Remember the two questions we wanted to answer were 1: What is the theoretical justification of reducing complex to simple labor? and 2. What is the mechanism by which this happens?
The theoretical justification is that the market already abstracts from concrete qualities of work and reduces them to quantitative differences. This makes it possible for us to talk about complex labor being multiples of simple labor. When labor is considered in its abstract form as universal average labor, the qualitative differences in work become quantitatively related. ie. A doctor produces 10 times the value a factory worker does in an hour.
Why is this? Why is complex labor complex? Complex labor represents the pent-up value of years of training. This is not only the work that the student expends but all of the labor of the teachers and others involved in the training. All of this labor is not realized until the skilled worker begins working. Any musician is familiar with this concept. He practices the piano 5 hours a day only to perform once a week. The stored up value of all of that practice is condensed into that one hour of performance. This is why that one hour of performance produces more value than an hour of simple labor.
[In some ways this is similar to the way constant capital is treated. Constant capital (machines, raw materials, etc.) all represent past labor. Yet the value of constant capital isn’t realized until living labor turns it into a finished commodity. Constant capital like machinery can also make labor more efficient than the social average thus creating super-profits. I believe that Itoh has criticized this constant capital-like analogy though I can’t afford to buy his book and the copy on Googlebooks leaves out the two pages where he makes these criticisms. I think the critique has to do with the equalization of profit rates. I assume the argument is that if the added value of skilled labor is just a cost of past labor like constant capital, this means that the rate of profit of skilled labor is lower than that of simple labor. But I wonder if Itoh makes the connection between labor-saving constant capital that allows for super-profit and skilled labor which produces more efficiently than the social average and thus garners a super profit… I also wonder if thinking of the problem in this way may venture too close to neoclassical human capital theory.]
This helps explain the theoretical justification for treating complex labor as a multiple of simple labor. But what of the 2nd question: What is the mechanism by which this happens?
Like any market phenomenon whether it be the creation of abstract labor, the establishment of socially necessary labor time, or the reduction of complex to simple labor, these are spontaneous phenomena that take place behind the backs of producers. There are social processes that establish a base-level of skill we call simple labor. There are other social processes that train people to have very complex skills. The more efficiently they work relative to simple labor the more value they create relative to simple labor.
Some people insist that there must be more to the theory than this, that there must be some mechanism for measuring the amount of simple labor in complex labor. But this misses the point. There are many economic phenomena that are hard to measure but this doesn’t mean that the phenomena are not real. For instance government statisticians try to measure how many year 2000 cars are worth how many 2010 car. In doing so they have to use guess work and arbitrary assumptions. Yet this doesn’t mean that we should question the theoretical possibility of comparing the value of cars, or the existence of cars. (This point is taken directly from a chapter of Andrew Kliman’s in “The Value Controversy” which is excerpted here:
Marginal utility theory, which imputes value to subjective psychology, is even more lacking in any method of measure. Prices are supposed to reflect more of less amounts of desire yet there is no empirically observable desire to measure. Thus we are asked to accept that whatever prices are must be because people wanted them that way.
Marxists economists interested in doing empirical research often disagree on how to handle the complex-simple labor issue. Some think that it isn’t important for large-scale, long-term analysis. Others think that the market expression of value should be taken as the expression of reduction. Still others think that the issue makes empirical work problematic. But most all agree that the possible difficulties in measurement don’t disturb the theoretical basis of the solution.