(This is a draft. All comments welcome. Citations and footnotes are incomplete.)
Labor as Substance of Value
Once Marx has established that value is a property intrinsic to commodities he immediately goes on to ask what this value is and what determines the magnitude of this value. The answer to both questions is human labor time. Human labor creates commodities. The magnitude of labor (the time spent producing) determines the magnitude of the value of the commodity. Value itself is ‘objectified labor time’. That is, once a worker has produced a commodity this commodity represents, or ‘contains’, however many hours of past labor. This past, objectified labor is value. Objectified labor is the substance of value. Active human labor time determines the magnitude of this value.
Why is labor the substance of value? Marx’s argument is quite simple and short.
A commodity is a product of labor that has a use-value and an exchange-value. We know that exchange value is an expression of intrinsic value so exchange value cannot be the substance of value. Use-value also cannot be the substance of value. Use-values are heterogeneous and thus cannot be compared with one another. How do we compare the use of an apple to the use of a piano? There is no common denominator which we can reduce all uses to. Furthermore use-value has no quantitative properties, only qualitative ones. We cannot divide the usefulness of a piano in half or multiply it by 4. Yet we know value is a homogenous substance, that commodities with value share a common quality that can be divided, multiplied, etc. Value implies numerical relations between commodities.
Once we have excluded use-value and exchange-value Marx says that the only property of the commodity left is that the commodity is the product of human labor. In some ways this is a very simple and obvious argument since Marx has defined the commodity from the beginning as a product of labor that has a use-value and exchange-value. Since exchange-value and use-value cannot be the substance of value then the fact that they are products of labor is the only remaining attribute which can explain the value character of the commodity.
Many objections have been raised to Marx’s argument over the years. The great bulk of these critiques can be found in Bohm-Bawerk’s 1898 book “Karl Marx and the Close of His System”. Marx was not alive to address all of Bohm-Bawerk’s critiques. Let us see what we can do to remedy this here.
1. Bohm-Bawerk takes issue with the structure of Marx’s argument. Marx has defined a commodity as being a product of labor with a use-value and exchange-value. When he shows that use-value and exchange value cannot be the substance of value then only labor is left. Bohm-Bawerk argues that this is only possible because of the crafty way in which Marx defines ‘commodity’, sneakily leaving out other exchangeable goods which are not the product of labor.
“From the beginning he only puts into the sieve those exchangeable things which contain the property which he desires finally to sift out as “the common factor,” and he leaves all the others outside.” p70
“To exclude the exchangeable goods which are not products of labor in the search for the common factor which lies at the root of exchange value is, under the circumstances, a great error of method.” p70
“ his idea of “commodities” is narrower than that of exchangeable goods as a whole.” p71
BB is correct. Marx does not look at all exchangeable goods when he derives labor as the substance of value. He intentionally only considers commodities, which he defines as being useful objects produced by labor for exchange. This is because, contrary to some interpretations, Marx is not trying to explain the phenomenon of exchangeability or to explain prices. He is trying to explain the commodity. He says so very explicitly in the first lines of Capital: “The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,” its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.” (also cite Notes on Adolph Wagner and Kliman)
Marx’s topic is the commodity because the commodity is the basic unit of capitalist wealth. Commodity production, production for exchange, is the dominant form of production. This does not mean that commodity production is the only form of production, or that commodities are the only things that are exchanged. It instead means that commodity production dominates all other production and exchange. A common theme in Marx’s writing is the way in which value relations permeate and impose their logic on all other forms of social organization. This means that in order to understand our society we must first understand its most basic unit, the commodity and the value-form that it contains. Then we can examine the way the logic of the commodity effects other aspects of social organization.
Still, it seems we have not entirely disposed of BB’s critique. After all, Marx is saying that labor and only labor creates value in a capitalist society. Yet there are examples of things that have exchange-value that are not products of labor. How does Marx deal with this? He holds that not everything with an exchange-value has a value. This seems odd at first since we have said previously that exchange-value is the form of appearance of value. If a good has no value, is not the product of labor, what is its exchange-value measuring?
In fashioning a response a good place to start might be to try to name some exchangeable goods that are not a product of labor. Bohm-Bawerk asks us to imagine the products of nature: trees, land, minerals. But it is quite hard to distinguish between the product of nature and the labor that is required to turn these natural products into exchangeable goods. Trees must be cut and transported. Minerals must be mined, refined and transported. The only product of nature that seems able to have an exchangeability somewhat independent of human labor is the land itself. Land, of course, is hard to distinguish from the built environment that humans have produced. Much of the land is a result of the construction of spaces and transportation networks. So it is actually quite hard to have a theory of the exchange-value of land that is entirely divorced from a theory of production. At the same time there remains an aspect of land that is not directly produced for exchange. This aspect falls under the category of rent.
The theory of rent is a bit too complex to deal with in detail here, but a look at the basic contours of the theory will help us answer the question at hand. One plot of land is different from another and these differences constitute different resource endowments that convey productive advantages to the owners of land. As producers compete to produce below the socially necessary labor time in order to outsell rivals these difference in the productivity of land allow some sellers to produce below the socially necessary labor time thus obtaining a super-profit (see chapter on SNLT). This super-profit can be capitalized upon to become rent. Rent is a function of the relation of different productivity of the land to socially necessary labor time. Rent is a derivative category which we can only theorize once we understand value production. The price of land is related to rent. (Once one also considers other derivative forms of capital like credit, we can theorize other aspects of the exchange-value of land, as land becomes the focus of speculation and other credit-based investments.)
Land does not just have value by itself. Rent does not grow from the soil. The value of land, rent, is a product of the relation of land to the productivity of labor. Thus Marx’s exclusion of land from his analysis of commodities is entirely justified. Humans have worked on land for millennia. It is only in a capitalist society that land takes the form of private property that generates rent. If we want to understand the price of land we need to understand the wider social relations which generate this price form.
Later in Chapter 1 of Capital Marx explores the exchange of other non-produced goods:
“Objects that in themselves are no commodities, such as conscience, honour, &c., are capable of being offered for sale by their holders, and of thus acquiring, through their price, the form of commodities. Hence an object may have a price without having value. The price in that case is imaginary, like certain quantities in mathematics.”
(As an aside I find it amusing that Marx uses such strange examples of non-commodities here like conscience and honor. Clearly it is hard to find examples of non-produced exchangeable goods! Perhaps a modern-day example might be a politician who sells his “loyalty” to the capitalist class or an athlete who sells his “like-ness” to advertisers.)
In discussing rent we decided that rent was a derivative category of value production and that therefore Marx was justified in theorizing rent after he had formed a theory of commodities. Here we have a different matter, “imaginary value”. The first thing we might note is that since conscience and honor are not products of labor they are not freely reproducible and thus do not respond to the laws of supply and demand, or socially necessary labor time, the typical forces by which prices are established. This is a good reason to exclude them from the class of goods that we are considering since this sale of conscience or honor does not follow any predictable economic logic. Rather, the price of conscience or honor would be whatever the two parties of the exchange decide upon at the moment. We draw no further conclusions or laws from this. If we were to use these exchanges to construct a theory of value we would end up with an indeterminate, nihilistic theory of value in which values are merely whatever people decide they are in the moment, with no law-like regulation by the production process. (This is, of course, the direction that BB and his ilk would like to move value theory, into a nihilistic, hedonistic terrain where value is whatever an individual decides it is leaving us unable to make any theories about social structure, class, or production relations.)
But it is not the fact that we can deduce no laws from it that Marx excludes imaginary value from the central focus of a theory of value. Instead it is because such exchanges are an entirely irrelevant and peripheral phenomenon in our society. The nihilistic, indeterminate logic of “imaginary values” does not extend into the realm of commodity production. So there is no reason to bend the laws of commodity value to fit into the arbitrary whims of those who sell conscience and honor. On the other hand, the basic category of value (and money!) extends over all exchangeable goods. Because commodity production dominates all production and exchange, the exchange of “imaginary values” takes the form of commodity exchange, even though it is not commodity exchange proper. To win the loyalty of a Cardinal in medieval Europe a king would need ply the Cardinal with political favors. To win the loyalty of a politician in a capitalist society one must give her money. Thus the price of loyalty takes the form of commodity exchange even if it is not commodity exchange proper.
By “form of commodity exchange” I refer to a class society in which most people must buy their subsistence and sell their labor power in the market because they are divorced from the means of production. Labor is organized through commodity exchange and money stands as the universal measure of value. The exchange of products of labor take the form of market exchange. The exchange of non-produced things, like honor and conscience, also take the form of commodity exchange, even though they are not commodities.
Though BB does not bring up the topic at this point we might also mention the exchange-value of produced commodities that are not freely reproducible. A one-of-a-kind work of art like a Picasso painting is a commodity but it cannot be reproduced. Thus it does not respond to the pressure of socially necessary labor time. The exchange-value of a Picasso is a reflection of whatever someone is willing to pay for it at the moment, much like honor and conscience. Marx excludes non-reproducible commodities from his analysis for the most part as well since they are peripheral to capitalist production. However, like imaginary value, when we look at non-reproducible commodities we see that they take the form of commodity-exchange because that is the dominant form of social labor in our society.
2. BB’s second objections to Marx’s argument for labor as the substance of value is that there are other common properties to commodities other than being the products of labor.
“is there only one other property? Is not the property of being scarce in proportion to demand also common to all exchangeable goods? Or that they are the subjects of demand and supply? Or that they are appropriated? Or that they are natural products?….Why then, I ask again today, may not the principle of value reside in any one of these common properties as well as in the property of being products of labor” (BB p.75)
Since value is a social relation this means that we cannot look to natural properties (natural products) of commodities for a common property. Excluding their natural properties is the same as excluding their character as use-values since use-value is directly tied to the natural properties of the object. In addition, as Marx argues, there is no such thing as use in the abstract, as use-in-general, so use cannot be the common property we are looking for. There are only specific uses for things.
Certainly all commodities are scarce in proportion to demand. Is this a property of a commodity? When we buy a commodity are we purchasing a sum of scarcity? A sum of supply and demand? How can these be the substance of value? Here again we see what happens when BB conflates value and exchange value. Marx is certainly in agreement that supply and demand affect the formation of prices. Yet he does not believe this to have any relation to the determination of value. These cannot be the substance of value.
Ultimately, when it comes to society, human labor is the scarcity that matters. Society only has so many hours in a day to produce the commodities needed to reproduce itself. It must apportion these labor hours in such a way that shit gets done. Yes, there is a scarcity of natural resources as well. But this scarcity is measured in labor time! If it takes a million hours of labor a year to produce all the oil society needs then a million hours if the measure of the scarcity of oil.
3. BB’s third objection takes a different tack.
“Labor and value in use have a qualitative side and a quantitative side. As the value in use is different qualitatively as table, house, or yarn, so is labor as carpentry, masonry, or spinning.”p76
Marx has said that use-value can’t be the substance of value or the determination of its magnitude because use-value is not homogenous. We cannot compare one use-value to another. Just as use-values are heterogeneous so too are the labors that create these use-values. The labor that creates apples is not the same as that which creates pianos. How can we equate the two? What makes them a common substance? Isn’t Marx using one argument to dismiss use-value and then ignoring the same argument when it comes to labor?
It may seem that BB has come up with a clever retort here unless we realize that Marx himself poses this same question in the first chapter of Capital. “As the coat and the linen are two qualitatively different use values, so also are the two forms of labour that produce them, tailoring and weaving.”
Notice however that Marx does not say here that the labors are qualitatively different in any and all senses. Rather he says they are qualitatively different as the coat and linen are different use-values. The aspect of human labor that accounts for the different qualitative use-values is “concrete labor”, heterogenous labor unique in the motions, skill and knowledge specific to apple growing or piano making. Yet despite these specific, concrete differences all labor is also human labor in general, or “abstract labor”. As will be discussed further in the chapter on abstract labor, labor is both concrete and abstract at the same time. As concrete labor it is heterogeneous, differentiated. As abstract labor, it is part of the total labor expended by society, the same as all other labor in the sense that it is a function “of the human organism, and that each such function, whatever may be its nature or form, is essentially the expenditure of human brain, nerves, muscles, &c.” (from fetishism section of Chapter one.)
So even though labors are different these different labors are all just examples of labor in general, of labor in the abstract. If Marx can make this concrete-abstract distinction with labor why not also for use-value or utlity? The answer is simple: there is no such thing as use in general. Uses are only concrete, specific to the commodity and the way it is used. [footnote]
But isn’t the fact that we have the word “use” that applies to both apple eating and piano playing evidence that there is a concept of ‘use in general’? A ha! This question brings us to the heart of what is really interesting and important about Marx’s concept of abstract labor. The word ‘use’ is a category which encompasses all specific types of using just as the word ‘labor’ is a category that encompasses all specific types of labor. However Marx is arguing that abstract labor is not just a theoretical abstraction, not just a handy linguistic device for tying together heterogenous concrete actions. Instead abstract labor is a real entity existing in capitalist society.
This is covered further in the chapter on abstract labor however the basic line of argumentation is this: There are multiple forces in a capitalist society that reduce human labor to an abstraction, a pure expenditure of physiological labor. Socially necessary labor time reduces all labor to its maximum output so that all labors everywhere are valued the same, that is, they are all labors producing at maximum efficiency. We can compare the labor of apple pickers to piano makers because both are human labor expended in its most efficient form. Capital of course has no care for the specific use-values it creates and therefore no care for the concrete labor that produces them. It only cares about value production, value in general. Thus capital treats all labor as abstract units in a giant profit calculator. Whether this labor produces apples or pianos or rubber ducks makes no difference as long as it is working at maximum efficiency. For this reason workers in a capitalist society have a much higher degree of subjective indifference to their work than in past societies. People move from job to job with much more flexibility than in, say feudalism where one was born into a caste and worked in the same capacity for life. Etc….
Thus Marx can say that labor is the substance of value because labor is both concrete and abstract at the same time.
Part Two: Other arguments
Setting aside BB’s objections it should be noted that some folks, Marxists included [Rubin for example], have not always found Marx’s above argument satisfactory enough to not need additional argumentation. Marx’s argument has the flavor of an analytical proof (a commodity is x, y and z. Since x and y can’t explain value then it must be z.) and such forms of argument don’t always sit well with folks. Andrew Kliman has advanced a very thorough defense of Marx’s argument (see “The Fourth Thing on the Third Thing”) which there is no need to repeat here. However, when something is true there are often multiple ways of knowing or explaining why it is true, so it does no harm to examine other arguments that have been put forward to defend the idea that labor is the substance of value.
Humans and Robots
Human labor most often uses tools or machines or even robots in the course of doing work. These machines allow us to be more productive. In a sense machines ‘do work’. But is this work the same as human labor? Many have argued against Marx by claiming that machines labor just as humans do (see Sraffa, Keen, etc.). This has led to discussions as to what specifically is so unique about human labor. Why is human labor the substance of value but the work done by machines, or even nature for that matter (like when the apple tree does the work of growing an apple) is not considered the substance of value? [insert footnote as to how the dead-labor in machines is transferred to the product.]
We use machines to make our labor more productive. Productivity is a measure of the amount of use-value created in a span of time. Since, for Marx, value is determined by labor time an increase in productivity (in use-values) does not create a corresponding increase in value. The same amount of value is created, just spread out over a larger quantity of use-values. This difference between use-value production and value production is one of the hallmarks of Marx’s theory of value. It allows Marx to explain many of the most important contradictions at the heart of capitalism: the domination of living labor by dead labor, the tendency of the rate of profit to fall, ETC. This also explains why unit prices tend to fall as productivity rises. If we were to argue, contrary to Marx, that machines create value then we wind up with a theory in which use-value production is the same as value production. An increase in productivity would mean an increase in value-production. This results in a very different theoretical understanding of the economy. Such an understanding cannot derive any of the same contradictions that Marx’s theory does. There is no tendency for the profit rate to fall with rising productivity, living labor is not dominated by dead labor, profit doesn’t come from exploiting workers, and prices do not fall with rising productivity.
Merely pointing to the different implications of these two perspectives is not some proof that labor is the substance of value. In the search for ‘proof’ defenders of Marx’s value theory have sometimes tried to point to the unique properties of human labor, properties that machines do not have. Marx himself makes reference to the unique properties of human labor in a famous passage: “But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. At the end of every labour-process, we get a result that already existed in the imagination of the labourer at its commencement. He not only effects a change of form in the material on which he works, but he also realises a purpose of his own that gives the law to his modus operandi, and to which he must subordinate his will.” [capital chapter 7]
With each successive revolution in robotics more and more types of activity are removed from the list of “exclusive human activities”, leaving less and less options for those who want to point to an essential aspect of human labor that differentiates it from machines. In the above passage Marx brings out probably the most essential difference between human labor and the work of machines: that the worker imagines the product and process before she commences production. However, in this age of rapid advances in computing and artificial intelligence I believe it is dangerous to hinge our argument on an aspect of human work that is directly under attack by the artificial intelligence industry. I think it is much more fruitful to find a unique property of human labor that holds even if robots one day can do every task that humans can do.
Caffentzis makes, in my opinion, the only possible argument: “if labor is to create value while machines do not, then labor’s value creating capacities must lie in its negative capability, its capacity to refuse to be labor.” [“Why Machines Cannot Create Value” Caffentzis 1997 in “Cutting Edge” ed. Jim Davis] In other words, what makes humans different than machines is that humans can refuse to work. This makes human labor a social relation. Humans must be coerced/convinced to do work. They do not operate like machines that can be just turned on and off. This distinction brings out the coercive side of value relations. Feudal society had knights and the Catholic Church to make the serfs work the land. Capitalism has value relations which are their own form of coercion.
Of course if robots ever evolved to the point in which they could refuse to work then their work would also become a social relation and thus would be value creating. Of course, if this ever happens we might have more important problems on our hands…
Production as the Dominant Moment
Marx’s argument for labor as the substance of value is often placed, quite rightly, within the context of his wider historical method which treats the organization of production relations as the central defining aspect of all societies. It is argued that since the organization of human productive activity is the defining aspect of all societies, and since the production of value is the specific form of organization this takes in a capitalist society, that the substance that capitalist labor produces is value. [cite Rubin? Hilferding?]
The organization of human social relations is not handed down to us by God. It is something we actively create and recreate each day. In an obvious physical sense our labor produces food and other necessities needed to continue our daily physical existence. But our labor also reproduces the social relations within which we live. When a feudal peasant produces surplus grain for the landlord they are reproducing the class relations of feudal society. So too do workers in a capitalist society reproduce capitalist class relations when they produce surplus value for the capitalist class. And this is not all that workers produce. Everything from the built environment, to the means of subsistence, to the forms of entertainment and diversion are creations of human labor, creations that must continually be reproduced in order to reproduce capitalist social relations. Marx sees this creative power as central to the organization of society. Other aspects of social organization like state forms, ideology, family, distribution, etc derive their character through the fact that they exist within a society organized by capitalist social relations. Capitalist states can, of course, take different forms, but they are all various forms of the capitalist state. Capitalist ideology can take different forms but they are all various manifestations of capitalist ideology. Their essential character is defined by their relation to the mode of production.
This way of looking at society is often criticized as ‘reductionist’. There are many forces that act upon and shape a society. What right does Marx have to privilege one aspect, production, above other aspects?
In his online lectures on Capital David Harvey gives this defense: “My own view of it is that it is an inspired idea but, like most reductionist arguments, ultimately it fails. But by taking that reductionist position you start to see all kinds of things you would not otherwise see. And without that reductionist impulse Marx would never have understood all manner of things.” After a brief aside about reductionism in the biological sciences he goes on to say, “…the very search for reductionism has produced very important insights in the biological field in exactly the same way that I would argue that Marx’s holding to principles of reductionism here plays a very significant role in his method of inquiry, in his compulsion to inquire. And one of the things I get annoyed at is people who say ‘Oh it’s reductionist therefore don’t believe it!’ If people were not prepared to be reductionist about things we would hardly know anything about anything.” (Reading Capital with David Harvey Class 2)
Regardless of whether one agrees with Harvey’s characterization of the issue this is a rather weak defense of Marx’s method. For Harvey Marx’s placement of production at the center of social relations is not an accurate representation of reality. It is merely an inspired viewpoint that allows us to generate interesting insights. Such criteria could justify any method of reduction if it generated an interesting insight. For our purposes here, justifying the argument that labor is the substance of value by appealing to the role of production as the central category in all societies, Harvey’s argument is even more useless. We are trying to justify the results of the method by showing the legitimacy of the method. Harvey is trying to justify the method by showing the legitimacy of its results. It is hard to justify the means by the ends in social theory. Is a faulty form of argumentation justified because the conclusions conform to our preconceived political opinions or because they paint a picture of the world that helps us ‘make sense of things’? No doubt people often do appeal to this type of justification but this cannot be an adequate framework for a radical theoretical project to critique and transform capitalism.
When we consider the relation of production to distribution, consumption and exchange it is easy to seem caught up in an endless game of ‘chicken and egg’. For example, production produces the objects we consume but consumption, or the need to consume, is the force which triggers the need to initiate production. How then does Marx have the right to claim that “production is the real point of departure and hence also the predominant moment”? (Grundrisse p.94) Marx is certainly aware of the ways in which production is informed by consumption, exchange and distribution, yet he insists that production is the dominant moment.
I believe that the best answer is to consider the alternatives. What would it mean to define capitalism as a ‘mode of consumption’ rather than a mode of production? What would a mode of consumption be? Just as there is no ‘use in general’, no ‘use in the abstract’, there is no general mode of consuming by which we can classify all of the consumptive activities of a capitalist society. We only have specific ways of consuming. Furthermore these are not social relations but relations between individuals and objects. The only aspect of consumption which can apply to all consuming activity is that most consumption in our society is consumption of commodities. This, however, is a definition that requires an understanding of commodity production. It is commodity production that stamps capitalist consumption with its unique character.
This same argument could be carried out in relation to exchange and distribution. To the extent that we can define a specifically capitalist mode of exchange it is commodity exchange. [Footnote on distribution. Tie in to the point earlier on about commodity relations dominating other relations. Follow Marx’s argument from intro to Grundrisse.]
There is a long history of debate about whether or not Marx’s theory of value can be empirically confirmed. Depending on how one understands the theory attempts to prove or disprove the theory empirically take different approaches. This is not the place to evaluate all of these. However a few points can be made that should help clarify the issue.
One of Bohm Bawerk’s chief complaints against Marx is that Marx ignores empirical evidence that contradicts his theory of value. BB argues that Marx himself contradicts his own theory of value laid out in volume one of Capital when later in Volume 3 he develops the theory of ‘prices of production’. I explain ‘prices of production’ in the chapter ‘Value and Price’. For now all that needs to be said is that in the theory of prices of production Marx shows how prices systematically deviate from values in the context of competition between capitals. BB sees this as an admission by Marx that in reality prices deviate from values. He takes this to be an empirical counter-factual that brings into question why labor should be the determinant of value.
BB makes repeated claims that Marx began with one theory of value and then later changed his mind when writing volume 3. We now know that Marx actually penned much of volume 3 before beginning work on volume 1. Marx was completely aware of the systematic deviation of prices from values when he introduced the concept of labor as the substance of value in the opening chapters of Capital. Clearly, to Marx, there is no contradiction between value and prices of production. Why does BB see things differently?
The answer to this question lies in the fact that BB is quite confused as to what value is in the first place. BB has conflated value and price. He thinks that Marx is arguing that the magnitude of price is determined by labor time. Thus if there is a systematic deviation of value and price this shows that other factors influence the magnitude of price. Therefor labor time cannot be the exclusive determinant of price.
However this is not Marx’s theory of value at all. Prices of production are prices which deviate from values (the commodity bears a price that is more or less than the labor time that entered into its production.) However prices of production are still a sum of value.
If I trade an apple pie worth 1 hour of labor for a piano worth 100 hours of labor I have sold my apple pie for far above its value. However both apple pie and piano are sums of value. The reason we can say that the exchange was an unequal exchange is because we know that both commodities have a value outside of their exchange value. Price is just a special form of exchange value, the exchange value of any commodity with the money commodity. If I trade my apple pie with money representing 100 hours of labor time then the same unequal exchange has taken place. And, once again, both the apple pie and the money represent sums of value.
If Marx had merely said that labor time is the primary determinant of commodity values then we could easily prove or disprove his theory with empirical studies of prices in relation to labor inputs. But Marx’s argument that labor is the substance of value is a different beast entirely. All money prices represent sums of value. These prices can be above or below the actual labor content of a commodity. This can happen through unequal exchange. It can happen through imbalances of supply and demand. And this happens systematically with prices of production. Regardless, none of these deviations stop prices from being sums of value or stop labor from being the content of this value.
What then can be done to empirically verify Marx’s theory of value? I do not believe there is any knock-down empirical proof that labor is the substance of value. However, the argument that labor is the substance of value suggests several tendencies/phenomena that can be empirically judged, to an extent. For one, even though prices systematically deviate from values this is a systematic deviation. They do so in a predictable way. This means that there are still correspondences between value and price. The chief correspondence is the fact that a decrease in labor time per unit produced (increases in efficiency) leads to falling unit prices. This is a prediction based on Marx’s theory of value and it is a prediction that is quite obviously borne out empirically again and again. Everyone is aware that commodity prices fall as labor becomes more productive.
Another phenomenon suggested by Marx’s theory of value is the ‘tendency of the rate of profit to fall’, a subject which has its own chapter in this book. If only human labor produces value then we would expect profit rates to fall when capitalists invest more in non-human inputs (machines, raw materials) than living labor. There is quite a lot of debate about the extent to which empirical evidence supports this theory. As with any empirical debate the devil is in the details. There are quite a lot of different factors involved in measuring profit rates, and even greater difficulties when it comes to showing any causality investments in living labor relative to machines and profit rates. It may be that the present state of record keeping and number crunching is in adequate to properly adjudicate Marx’s value theory through an empirical study of profit rates.
[footnote on Kliman’s position on whether his work ‘proves’ the TRPF]
The role of labor as the substance of value, and of labor time as the determinant of the magnitude of value, is one of the most controversial aspects of Marx’s work. At the same time it is one of the most crucial. Without a theory of value Marx could not have explained the phenomenon of surplus value which defines the class relation between capitalists and workers. Without a theory of value Marx would not have been able to understand the role of money in capitalism and to argue against the money-reformers of his time. Without value theory Marx would have been unable to theorize the recurrent crisis tendencies of capitalism. The list goes on and on. Value theory sits in a central place in Marx’s universe of thought.
Have you read: “Background and alternative Motive of Marx’s ‘Preface’ of 1859” (http://www.jstor.org/stable/2708568). It shows how German censorship influenced Marx. Highly recommended.
Posted this in another text:
“In his online lectures on Capital David Harvey gives this defense:”
True, but he did not include this statement in his print version of the lectures so I would not give this criticism.
I think he himself was not fully happy with this statement + later on his lectures on the footnote of chapter 15 he gives a completely different statement on Marx his method.
probably a good point. I can probably find a better example somewhere of someone making a similar argument without having to cite a video lecture.
Yes, but I still like your criticism. It is def. correct for the video statement. Harvey is not 100% consistent.
Yes he is rarely consistent on anything. I was hoping to find the argument replicated in one of his texts but I have not found it.
Yes, I also remember him saying what you quoted. He did not replicate it in his ‘companion’.
Workers produce more value than they are paid in wages. Why have socialist economists been unable to prove this with empirical evidence? In 2013 total production of goods and services was $10.7 trillion (NIPA, GDP tables.) Total wages and salaries in 2013 were (from private production of goods and services) $7.1 trillion. This is proof that workers, as a class, do not receive the “marginal product” of what they produce. They are shorted by about 30%, exactly as Marx showed. Why hasn’t someone pointed this out?
There is a statistic put out by the OECD: the median production, per hour, by dollar value, in the U.S. is about $50. The median wage is about $25 per hour. The production figure is based on the value of actual production, not an estimate, according to the OECD. In other words, value, surplus-value, and therefore, profit, is formed in the production process, not in buying and selling. The $25 extra is the surplus-value appropriated by the capitalist.
Finally, indirect evidence. The Bureau of Labor Statistics show that the index of labor productivity (what workers produce) is always higher than the index of wages. If workers received in wages the value of what they produced, then the indexes would equal out over time.
I am sure there must be other statistical evidence to support the labor theory of value.
Wouldn’t this be proof of the theory of exploitation not the claim that labor is the substance of value?
Aren’t the two directly connected? Workers produce value and capitalists take it. It seems to me that most capitalist economists claim that workers are paid the value of what they produce, therefore there can be no exploitation. My contention is that there is specific, quantitative evidence that workers are not paid the full value of what they produce.
And this raises another question I have. Marx said that human labor is the only commodity which can produce more value than it consumes in the production process. Labor is the only way to create value. How is it possible to prove that labor actually creates value while it is working, especially when the capitalist says that value is created in the process of buying and selling, and offers as proof that profit, surplus-value, comes into view when the product is sold? Marx said that the capitalist was confusing the appearance of profit with its origin. How to prove that value is created by labor even if the concept is logically correct?
Allan, I believe that the figures you quoted prove only that the value of the product is greater than the wages paid to workers. But this empirical data does nothing to prove that workers created any of that value. The fact that this value is objectified labor time is not proven by the figures you quote. What figures would prove this? I have not read their work recently enough to comment at length upon it but there is the work by Cockshott and Cotrell: Cockshott & Cottrell, “Robust correlations between prices and labour values: a comment” in Cambridge Journal of Economics, Vol. 29, No. 2
Kliman has a critique of this approach in a very sarcastic paper “Christianity and Alternate Faith bases”: http://akliman.squarespace.com/writings/Christianity%20vs.%20Alternative%20Faith%20Bases%205.23.10%20doc%20version.doc
Well, if the value of the product is greater than the value of wages then I think that would disprove the theory of the marginal productivity of wages. Especially if the value of the product is determined at the time of production, which would include any estimate made by the capitalist up to and including the value of the product at the point of exchange, as, for instance, the value added by a check-out clerk.
The marginalists maintain, and will never surrender, their theory that the value of a product is not fully determined during the process of production. They must maintain, at all costs, that the extra value, profit, is determined during the process of buying of selling and that, therefore, the worker had no role in determining that value, profit.
But, if the figures prove that the value produced by the workers is greater than the value of their wages, why haven’t socialist economists been shouting that out from the rooftops? It would be an absolute confirmation of Marx’s exploitation theory. It may not prove the labor theory of value, but it would be a huge step forward.
1. Marginalists: Workers are paid the value of the work they produce.
2. Marx, no they are not.
3. Proof? Aggregate wages (including all ‘compensation’) are less than aggregrate production.
Thank you for responding. It helps me focus my thoughts.
By the way, Picketty has apparently proved that inequality of wealth is an inherent and possibly uncorrectable characteristic of capitalism. I think he is wrong about r>g (are those widely accepted economic terms or only his inventions?)
They haven’t yet arrested Picketty for being a communist, so maybe this is the time for economic statistics to finally show the fundamental contradictions (OMG!) of capitalism, (sorry about any typos.)
How would statistics prove that the surplus value of the annual product was produced by workers and not by some other factor? I would think that many different theories of surplus value explain the empirical phenomenon of surplus value. How does the empirical evidence support Marx over, say, time preference theory or the Sraffian theory that machines can produce a surplus?
Labor is the value-forming substance. It is not the substance of value. Value is a substance that is formed by labor. Marx in the first edition of capital wrote that labor is the substance of value but he made it more accurate in the second German edition and the French edition of Capital. Look out also with Engels last edition (the Penguin one). Engels did not include all the changes of the French edition (the last one that Marx edited). Please be careful with editions: there is also an editorial history for Volume One.
So I have some questions.
Labor is both an exchange value (it is exchangeable for commodities) and, it is also the value substance?
So labor is 1) value… Which again also… 2)possesses itself again as an exchange value…?
Further, the value, of the labor value is apparently, in means of subsistence (for the worker?), so again, this labor ‘substance’ possesses itself again in output, which then how else would we understand the “means of subsistence” without, exchange value again?
So the theory possesses that as well?
Is more labor time value always equated with a higher exchange value?
The value just possesses the exchange value. Why is it that more value then, equals more exchange value?
Does this then point to the pure theoretical aspect of just applying a theoretical time to labor, equating exchange value to it’s magnitude, being consistent in narrative, and *insisting* that commodities be traded at their value?
I’m not sure if I understand any of your comment. I think there may be some terminological confusion. To clarify:
labor is the substance of value. But labor is not a commodity with an exchange-value. Labor-power (the worker’s ability to do work, her working time) is a commodity. The worker sells her working time, her labor power, to the capitalist as a commodity and receives a wage for this. The wage is (hopefully) adequate to allow the worker to purchase means of subsistence in the form of commodities.
Value is socially necessary labor time. When compared to another commodity it expresses itself in exchange-value.
Nobody is “insisting” that commodities have to be traded at their values. Exchange values diverge from values all of the time. The “narrative” is consistent because it accurately describes reality.
Perhaps my previous post on “intrinsic value” would clear up some of these questions.
“Value is a socially necessary labor time.” But this can’t mean that workers receive this labor time value as wages, because workers always, in the aggregate, and on average, receive less than the value they produce. It seems to me that this means that “socially necessary labor time, is, as Marx stated, the only commodity which can create more value than it consumes. So that socially necessary labor time creates value but only a portion of that value is received by labor. The workers receive the value of their commodity, their labor-power, but they then create new value.
thanks for the response on time preference and machine produced value. i will check on that.
I would say that labor is a use-value and an exchange-value, thus a commodity. But, as Marx said, it is the only commodity which can create new value. That new value is then traded at its value, but the capitalist keeps the added value.
I think you mean “labor power” not “labor”. Labor is not a commodity. Labor-power is.
Value is defined by Marx as ‘congealed quantities of homogeneous human labour.’
Exchange value and value: the former is the form of appearance of the latter.
(To grasp this difference, exchange-value can be seen, for now, as represented by
price, while value is the amount of abstract labour embodied in the commodity;
the price always oscillates above and below value.)
The magnitude of value = quantity of labour contained; and ‘this quantity is
measured by its duration.’
Socially necessary labour time: ‘the labour time required to produce any use-value
under the conditions of production normal for a given society and with the
average degree of skill and intensity of labour prevalent in that society’ (Capital, V1, 1976, p.129).
Magnitude of value: ‘the amount of socially necessary labour time necessary for
Value and productivity: ‘In general, the greater the productivity of labour, the less
the labour-time required to produce an article, the less the mass of labour
crystallized in that article, and the less its value’ (p.131).
Substance of value = congealed labour
Measure of its magnitude = socially necessary labour-time
Productivity and value = inversely related
Appearance of value = exchange-value
So when labor itself. Acts as labor power (which is an aspect of exchange value, applied to the labor itself, also producing use values as useful labor, another quality applied to labor itself) at a time that is socially necessary, it is value. (Or is it always value, yet it struggles with the socially necessary labor time?)
SO that means labor itself has itself twice. Once as value, once as exchange value, as a labor commodity.
Then further, the labor itself (not as exchange value) has a value. And it is its means of substance, which is not directly labor, but a product of labor…. Is the value of the labor itself.
And, this only applies to the worker, not the capitalist… I suppose self employed is all?
Subjective theory, I believe, doesn’t work like that. It just says subjectivity has an ..effect.. on prices.
Marx’s theories, I believe, are not about ..effecting.. prices.
But then, the value is “tied” to the exchange value. Which we know, doesn’t happen.
So then, in ..theory… labor as value, when it increases in time, it increases the exchange value manifestation at full value.
In ..reality.. the exchange value expression of labor, is not uniformly tied to time.
Although, it as the exchange value aspect applying to the worker, in wages. Does usually increase, in time.
Then further the idea that labor is value is only really, relating to reality, because we make all these ‘add ons’ like, socially necessary labor time, commodities being traded at their value, value is not value without use value etc..etc..
The idea that labor is this some underlying substance that can lead us to understand the whole economy cant work unless we make the categories and distinctions to make it work. Or is that just capitalism?
I am having a very hard time following your comment. I think there is some terminological confusion that is making it hard to understand you.
labor does not “act as labor power”. People perform labor. They sell their ability to perform labor to the capitalist. This is labor power.
I don’t know what you mean by saying that labor “has itself twice.”
labor does not ‘have a value’. Labor power has a value, corresponding to the value of the means of subsistence required to reproduce the worker. Past labor time, the labor time that went into producing the commodity, IS value.
I don’t think socially necessary labor time is an “add-on”, a stipulation necessary to make the theory of value work. It is an integral part of the theory of value.
Well their labor ‘acts’ as labor, as value, when it is selling itself as a commodity and not at home cleaning.
I say ‘has itself twice’ because.. There is the labor value, and its monetary expression.
The monetary expression has wages in it as well as profit. The wages correspond to the labor as well to the whole monetary expression being corresponding to labor.
I still have no idea what you are saying. Let’s say I pound nails, that that is my labor. What does it mean to say pounding nails acts as value or that pounding nails sells itself? I, a person, sell my labor time, my ability to pound nails, as a commodity. The labor doesn’t do any selling or any acting. I, a person, do those things. The labor is not a person. It doesn’t do anything. I do the actions. I do the labor. I have things.
I don’t get “has itself twice”. How does my pounding nails have anything? It is not a subject. It is an action. How does an action have something? “have” is used with a noun, a subject that then ‘has’ another noun, its object. Labor creates value but it doesn’t have value. The past labor embodied in the commodity is value. Labor can’t be value and have value. Labor power has value. There is a difference between labor and labor power.
Yes, value has an expression in exchange value and price. But there is no ‘twice’ in this. Exchange value is the form of appearance of value. There is no doubling of value.
Yes value consists of necessary labor time and surplus labor time. This labor time corresponds to wages and profit.
1. I think that some of the terminology of Marx has become outdated and confusing. What for, instance is the difference between “labor” and “labor power?” Workers’ labor is used by the capitalist to produce a product. Only a portion of the value of that product is received by the worker. Why have to continue to use a phrase like “labor power?”
2. Use-value, exchange value, and value. Use-value is fairly easy to understand, it is utility. Exchange-value is price, Value, though, is the word that is almost impossible to understand. It had real meaning in the 19th century, but what does it mean today? To say that value is the socially necessary amount of labor time embodied in a commodity is only to further confuse people
3. What about replacing (after all, language changes over time) those words, with utility, price, and profit? So, labor is paid for at its price, wages, and is used to produce a commodity that is sold at a price, but that price includes the profit added by labor. Labor may be paid its “marginal utility” value in wages, but labor then creates additional utility value for which it is not paid. A worker assembles a car with parts provided by other workers. The finished car has more utility than the parts. The capitalist sells the new utility as dead-labor (the parts) plus the added-value (profit.) In this case most people understand the term value-added or added-value.
Thus, you get this equation: Labor + Non-Labor + Profit = Price or, the Price of Labor + Price of Non-Labor + Profit = Price. This three part equation appears in the BEA figures as table 1.15 of the NIPA tables.
4. Also, on a previous question I had, the BEA (GDP) statistics show goods and services produced, the private investment (in machines, structures, intellectual property, etc.) in that production. So that even if you add wages and investment you still come up with less than the total of goods and services produced. And even this does not take into account the fact that it was labor which produced the investment machiney, etc., used in the production process.
5. I have been trying to locate some figures which would show total production and the specific costs of production, e.g., wages/compensation, investment in machinery, etc, costs of raw materials, interest payments, and other costs. All figures I have seen show that the total production costs are always less than the total product. Of course the capitalsts say that is because the profit comes from the work of the entrepeneur’s buying and selling the product in the market. They refuse to even consider the possiblity that profit is added by the worker.
Alan… really? You don’t know the difference between labor and labor power? Are you objecting to the words used to describe the concept or the concept itself? Sure we could use other words. We could call labor power “apples” and labor “oranges”. But we still have to make a distinction between the two concepts. If we don’t then we end up saying that the worker only creates as much value as the wage. It becomes a cost-theory of price where we just compute the returns to various factors of production.
There is no quantitative relation between the production of use-values and the value of those use-values. You can’t mix and mingle those categories. Yes everyone knows that price is equal to wages+inputs+profit. The question is where the profit comes from. If it comes from production then we need to distinguish between labor power and labor in order to theorize surplus value.
Why is value impossible to understand? Why do you say it made sense in the 19th century but not now? What has changed? Do you understand value and if so what do you think would be a better way of explaining that exchange value is merely an expression of an intrinsic property created by labor?
“Yes value consists of necessary labor time and surplus labor time. This labor time corresponds to wages and profit.”
Didn’t Marx say that the magnitude (or amount) of value is the labor time socially necessary for its production.
And “All that these things now tell us is, that human labour power has been expended in their production, that human labour is embodied in them. When looked at as crystals of this social substance, common to them all, they are – Values.” (Chap I, Capital.)
So, value is labor, embodied labor, congealed human labor. How much value a commodity has is determined by amount of labor time socially necessary for its production.
So, wages can’t simply be the necessary labor time for the production of commodities. The capitalist cannot allow the worker to expend more than the necessary amount of time to produce the commodity, yet the capitalist still has to make a profit.
The worker must produce more value than the value of her own production. This is, according to Marx, the unique capacity of human labor.
“it is not well understood in the history of interpretations of Marx that the ‘concept of value’ and its ‘substance,’ labor, are not to be regarded as hypotheses that still need to be proven – such as the completely wrong proof that commodities are exchanged exactly at their values…Marx,…assumes that the material wealth of society first consists of produced goods that second are produced in capitalism for exchange. Commodity producers create objects that are socially necessary; however, they do not produce for others’ needs in order to satisfy them, but to exploit the dependence of others on their products. Those who offer their products for sale want to see an equivalent value – and indeed as much as possible. In the exchange, it is revealed how much exchange value, how much property one has delivered with his productive effort. Via the competition of seller and buyer, how much demand a manufacturer will find for his product is found out, how much dependence he can exploit; because only in the degree of their dependence do customers recognize the productive efforts of others qualitatively and quantitatively as part of social labor, by giving their own product for it. It is not the labor, the approximate labor-time which the producer has individually spent, that is remunerated in the exchange; rather, in the equivalent that he receives for his commodity, he learns how much socially necessary labor-time he has embodied in his commodity – his actual labor may last longer or shorter. In a society of competing private producers who do not divide the work in an organized way, but in which each seeks to exploit social needs on their own initiative, the necessary connection of the partial labors just asserts itself in such a way that they only relate to each other in the finished product – in the achieved exchange-value – and it is reduced to socially necessary labor. In value, the private producers get ahold of the purpose of their labor: purchasing power, the socially valid power of access to others’ products and others’ services.
…Marx by no means characterizes value-forming labor as a transhistoric quality which always and everywhere applies to labor, but with this identification skewers its specific feature in the capitalist economy, and thereby its misanthropic irrationality. “Expenditure of labor-power in the physiological sense” is an abstract, ancillary aspect in any labor – one must concentrate, exert energy, use strength. In commodity-producing society, this abstract aspect becomes the all-deciding criterion of the social validity of labor, the measure and indicator of the value created by it. Where it is about capitalistic wealth, thus the usefulness is abstracted from in practice, it is never about the performance of concrete labor to produce useful goods as such. Instead, because expenditure of human vitality, thus effort and toil, is synonymous with newly created wealth, an insatiable need prevails in the commodity-producing society for ever more expenditure of labor. The type of wealth measured by value can only grow through a surplus of labor toil, which by producing commodities produces the power of access to other people’s property – and that is what matters; because capitalist wealth consists of this power of disposal, and not the use of the mass of useful products.”
Sorry but the passage cited from ruthlesscriticism should read “[Michael Heinrich and not Marx] skewers its specific feature in the capitalist economy, and thereby its misanthropic irrationality”
I think what I mean is when you said..
> Yes value consists of necessary labor time and surplus labor time. This labor time corresponds to wages and profit.
I think I mean, the “labor time” …of the worker…. ” corresponds” or I said, ‘has’… “wages and profit”
the wages belong to the worker, and so does the labor time.
So pounding nails is your labor, and (as the expression of your labor) your labor ‘has’ wages.
Maybe I can ask… value is supplest to be about some underlying thing we can study to understand the economy. And it comes down to, labor as in input into production, or the first or universal input.
But according to Marx. It is the labor “behind” the inputs, that is its value.?
Marx said that price is the monetary expression of value. Can we say that price is the monetary expression of labor?
Why would you want to do that?
Why isn’t price as the monetary expression of value, determined by socially necessary labor time satisfactory.
I think it is good Allan that you are familiarising yourself with and asking questions about many of these concepts (re value, use value, exchange value, etc) but to dwell on them for too long and to focus all of your attention on them is to miss some of the central insights and criticisms of capitalist society that Marx has to offer. These concepts that you are asking about were not developed by Marx but Smith and Ricardo. Many people who are first coming to Marx have not read Smith, Ricardo, etc and assume that the concepts Marx analyzes, assumes to be true but most importantly criticizes, miss some of the central points he is trying to get across. Many of the passages in Capital are written in such a way that Marx is putting forth the point of views and arguments of others and then criticising and questioning their validity (CAPITAL as a text is a two pronged attack both on capitalist exploitation and a critique of the whole discipline of political economy)
Is it possible to show, by empirical evidence, when surplus-value or profit is created?
It’s at the moment the worker has produced more in value than is requires to reproduce his labor power.
I understand that, but my question is how can you prove it?
My philosophical argument, and an analysis of the falling rate of profit.
I mean: By philosophical analysis.
^ Yes, surplus labor creates profit. But for a self employed person their profit creating labor is labor for themselves.
And yes, everything you see in prices etc. etc. is the expressions of labor in commodity production.
I can’t tell if these questions are jokes, written by non English speakers, or generated by a spam bot.
Any eta on when the book comes out, and do you have a publisher? I can’t wait.
Yes, where is my postmodern sentence generator when i need it.
What are the definitions of the following terms, in plain English, of less than 25 words.
Labor power is the physical, and biological ability to do work. When we work we break down ours muscles, our cells, and our stamina. So when the capitalist pays for labor power, he is paying to renew all that stuff, so we can show up to work the next day.
Labor is what adds value to a commodity. It’s actual work.
Allan. Pay Attention!!!!! There is nothing nebulous or unclear about the two terms. They are distinct categories and can be precisely defined.
Labor power: the commodity the capitalist buys with the wage. The commodity is the worker’s ability to produce value. The capitalist doesn’t buy the value itself. He buys the capacity for value creation. How much value is produced depends on the rate of exploitation. Labor power is purchased at the price of the means of subsistence. But the capitalist owns all of the value created in production including value in excess of the wage.
Labor: work under capitalism. This labor creates value. It creates the value of the wage and it creates surplus value.
Without this conceptual distinction you cannot theorize surplus value or exploitation.
I don’t think there is any empirical proof that surplus value is created in production. There is also no empirical proof for any bourgeois theories of profit. There is the empirical existence of profit which must be theorized. The best any empirical data can do is show a correspondence between two figures. It cannot prove causality.
You have serious patience BC.
It’s true that it cannot be proven empirically, but it seems to be proven logically. And these can serve as proofs to a degree. The question is rather the logical proofs are sound (actually true). But we don’t need empirical proof to be certain we aren’t way off the rails.
The tendency of the falling rate of profit is a logical implication of the theory of Marx. It should be there if Marx is right. And it is (see Kliman). We should think through other empirical implications of the theory and write a paper about it.
I think it should be possible to test the law of value empirically. I would say: “why not?” because every concept of Marx is very concrete: average labour time, etc.
The best way would be setting up an experiment in a laboratory setting. You make 30 small enterprises that produce things in a capitalist way, you let them pay workers, you install a market. 15 of the companies produce necessities. The other 15 produce constant capital. You install each company in a different building without informal or formal contact (only market place gives formal contact). The experiment should be controlled off course etc. It is possible. It can be done. It should be done.
You’re of course right MrExerPresent. There is corroborating evidence for Marx’s labor theory of value. But Alan’s concern is purely empirical, whereas it’s clear things can be true even if we lack empirical justification.
Labor itself only produces value when it engages in value production.
Its obvious, when you are cleaning your room with labor, you are not engaging in capitalist production. You are not producing objects to be exchanged (commodity production). Nor are you getting a wage as a worker.
So labor power is a specific type of labor, labor engaging in capitalist production (and Capital volume I focuses on workers specifically)
And there is emperical data of the ..expressions… of value producing labor.
But not empirical data on value producing labor that I know of (althogh I think some try?)
Michael Roberts even used profits over wages to get the rate of surplus value for the US economy.
Productive labor is the specific type of labor. Labor power is a capacity we all have, regardless of if we are in our rooms or working.
What is the point of making the distinction?
To figure out how the capitalists derives a surplus….It is THE point of Capital Vol I
Yes, CB once again made an essential statement on the matter.
“Labor power: the commodity the capitalist buys with the wage. The commodity is the worker’s ability to produce value.”…
“Labor: work under capitalism. This labor creates value. ”
Labor power is the ability to produce value. Labor is work that creates value. Is there any real distinction in these two definitions?
The real issue is that human labor (whether potential, kinetic, ability or actual) produces all value, but the worker receives only a portion of that value as wages. The rest is taken by the capitalist as profit.
Yes there is a difference between the capacity to do something and the doing itself. The capitalist does not buy labor. They buy the ability to do labor. If they bought the labor they would be buying the full value of the labor, that is necessary and surplus labor. But since they are buying labor power they are only paying for necessary labor. The fact that workers are only paid part of the value of their labor is a result of the fact that their labor power is a commodity which is sold in the market AT IT’S VALUE. The value of labor power is the value of the means of subsistence.
With this distinction Marx was able to theorize capitalist exploitation arising in production from the exploitation of labor. His distinction between labor and labor power allowed him to theorize this phenomenon which previous thinkers could not. Other theorists had assumed that the value workers produced was equivalent to their wage…. return to factors of production, etc. People who say “the value of labor” are confused/confusing because it is not clear if they mean the value of the commodity labor power or the value created by the worker. These are two different magnitudes.
“The real issue is that human labor (whether potential, kinetic, ability or actual) produces all value, but the worker receives only a portion of that value as wages. The rest is taken by the capitalist as profit.”
This is a confusion. Marx is trying to show that even if things are exchanged at their value, the worker is still exploited. So in the best case scenario, where the capitalist isn’t making you work off the clock, or paying you illegally under the table, exploitation still occurs.
Your quote makes this not the case though. The capitalist can pay the FULL VALUE of labor power, and the worker is still exploited, because the capitalist doesn’t buy the workers actual LABOR. If he bought the actual labor he couldn’t make a profit.
Here’s a simple example. I worked in a sub shop. I often made $2,000 worth of subs a shift for customers. If the capitalist paid me $2,000, he would make no money. That is, if he paid me for my actual labor – i.e., the labor I did to make subs – he would break even. But he pays for my labor power, that is my ability to show up to work, and exert energy, go to sleep, and come back. That was valued at around $45 a day (minimum wage). So he paid me the equivalent of my labor power, and he received the equivalent of the labor I did $2,000.
If you blue the two together, you can’t understand how labor is the source of surplus value, when equal exchange occurs.
I’ve always had trouble with Marx’s use (no pun intended) of use-value, exchange-value and value. Use and exchange values are fairly easy to understand. But the word “value” seems to imply a concept that includes both use and exchange, but Marx’s argument was that the “value” of a commodity is determined by the socially necessary amount of labor time contained in it.
Would it be fair to say that a commodity contains use-value, exchange-value and value, sort of C = UV + EV + V, or Commodity = X + Y + Z?
a commodity IS use-value and value. Value is expressed via exchange-value. For the importance of the concept of value see my previous post on Intrinsic Value.
Use value isn’t a magnitude, so no C cannot = UV. That would be like saying 7 = apple on my desk. It just doesn’t make sense.
C is worth V (value) which is expressed in its EV (exchange value), or cost price.
Here is where the misinterpretation of Marx’s theory (equating it with the Ricardian one) lies. The idea that commodities represent the amount of labour time necessary for their production was not Marx’s invention, to all of classical Political Economy this point was central (see footnotes in CV1, p. 129 fn.9, 137 fn.16, 142 fn.18, 173 fn.33).
Although the false impression that Marx completely identifies labour with value is frequently reinforced in the first three sections of chapter one, for instance, when Marx writes that value is ‘congealed’ or ‘crystallised’ labour (M:128-130), he emphasises that “the form, which stamps value as exchange value” remains to be examined (M:131). In order to simplify the exposition and to present his argument in stages, only analytically does Marx separate value from its expression in exchange value (the appearance of value) (M:142) which is a “definite social manner of expressing the labour bestowed on a thing” (M:176). Marx also points out that his theory is different from previous ones in his close examination of the form of value (M:174 fn.34).
Hence for Marx, value is not a technological concept (M:148) but rather a social phenomenon: value expresses the social relation (M:149) between producers, the socially necessary labour time of the individual producer in relation to the labour time of society as a whole (M:165). This point can often be made easier to understand by keeping in mind Marx’s central concern: how human working activity is regulated in a capitalist society.These concepts were not Marx’s invention nor did he use them differently (to all of classical political economy these concepts were central).
Nevertheless I still have a problem with the value of land. You say it’s derivative to labour value.
But imagine three tribes, a, b and c. A has on its territories some good stones needed for hunting, b has a plant which works as an antitoxin and c has delicious mangos. Nobody is working, they just allow each other to access their territory to collect some these natural resources. Now since they all know that stones and antitoxins have a greater use value (you need them to survive) than mangos, a and b can “exploit” c. After trading a has some antitoxin from b and half the mangos of c, b has some stones and the other half of the mangos, c has some stones and antitoxin but no mangos anymore.
There is nobody working, but natural resources have still value and these values can be compared based on their use value for survival and after trading a and b are richer than c.
For me, nature is like a machine and both produce value, even surplus value, if nature produces more value than it consumes (think of an animal whose output: milk has more value for humans than its input: grass).
So I always tried to read Marx not as saying nature or machines can’t produce value but they can’t produce profit. They are constant capital. Capitalists as a class can’t get richer by trading land or machines. They have to “trade” with workers which are the only source of profit (not value).
Why does Marx think machines or nature produce no profit? I think this is very important:
“Caffentzis makes, in my opinion, the only possible argument: “if labor is to create value while machines do not, then labor’s value creating capacities must lie in its negative capability, its capacity to refuse to be labor.” [“Why Machines Cannot Create Value” Caffentzis 1997 in “Cutting Edge” ed. Jim Davis]…”
Nature and machines can’t say no, I agree. But their owners can say no. What’s the difference between an owner of a mango tree, a steam machine and a worker? Why is the worker not just an owner of human capital? Why aren’t we all capitalists?
For me there is only one answer. In capitalism the first two are privileged. They can say no to nonprofitable offers. Workers have to work to survive, no matter what. But doesn’t an owner of a steam engine has to keep his machine busy too? Where is the difference to a worker?
To solve this, I always have read Marx as a Pre-keynesian. (For me “Theories of surplus value” the 4. volume of “Das Kapital” is very important.) The essential difference between a capitalist (or a landowner) and a worker is that the property of the former can be used as collateral, that’s why the capitalist or the landowner has access to money, he can get credit. The worker can’t get credit, to get credit he would have to pledge himself, which presupposes slavery, you need the right to sell yourself in case you can’t pay your debts. Without being allowed to sell yourself human capital can’t function as collateral and has no access to money. That’s why it’s wrong to treat human and non-human capital alike. Without access to money workers can’t start production. “Say’s law” that supply creates is own demand is true only for capitalists. They can get money by pledging collateral if there is a profit opportunity. Workers can’t do that. The means of production workers are deprived of is credit creation.
If this is right, one could predict that the falling rate of profit will only allow for full employment if either new profit opportunities are found or “slavery” is reintroduced. Consumer credit, mortgages, student loans are these new forms of serfdom which support employment by treating humans as collateral. So maybe capitalism is over (because profits are down) but instead of mass unemployment a new kind of feudalism (serfdom) is emerging? Isn’t this what is happening since the 80s? Rising debt to support employment? Financial capital ruling industrial capital?
Your mixing up value in terms of economics, with value in terms of the standard definition of value, i.e., something we grant importance, revere, cherish, respect, etc. I value my dog and my wife. But I would never put an (exchange) value on them, because I value them in a different sense. But there’s something I do value, like my books, that I would also put an (exchange) value on.
You’re suggesting that because these tribes value things in the second sense, that the first sense (economic) is now moot. You’re playing semantics, you’re not drawing distinctions. And this doesn’t help us explain the value of mass produced commodities in a capitalist society at all. You shouldn’t leap from a fictitious gathering commune, to capitalism, without recognizing that there are MANY hurdles and mediating factors that need to be considered.
“For me, nature is like a machine and both produce value, even surplus value, if nature produces more value than it consumes ”
That’s great that you think that. Marx doesn’t. Would you mind explaining why your thoughts are superior? Instead of just asserting them.
I think we both agree that nature or machine produce use value. Here is Marx himself, “Critique of the Gotha Programme”, Part 1, first paragraph: “Labor is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labor, which itself is only the manifestation of a force of nature, human labor power.”
Now, why can’t these use values not be expressed in exchange values (without labour interfering)? Why do they have to be derivative? Imagine that self assembled robots get invented, human labour is no longer needed (only unproductive labour like lawyers, policemen, ideology producers are still needed…), wouldn’t energy sources (oil, gas..) still being valuable, even in the absence of human labour?
My three tribes example is not completely unrealistic. David Graeber tells us that there was no trade going on inside tribes, but there was trade between tribes. And they even had fun to outsmart each other.
Before robots can ‘self assemble’ they would first need to be designed and conceptualised and afterwards they would require supervision, maintenance, etc.
No need to imagine anything when it comes to the invention and use of robotic technology, they have been used in manufacturing, particularly in the production of vehicles, for some time now.
See my previous post, your mixing two analytically distinct forms of value into one.
In order for something to have exchange value there must be something commensurable about these items, which allows them to both have value independent of their atomic make up/size/weight,etc. That something is a labor time. We can’t measure naturally produced goods like clean air that way.
Therefore in a fictitious society where there is no labor there is no exchange value. Your example actually proved the opposite of your claim once you draw the analytical distinction between value in an economic sense and value in a relational sense. If everything was automated we wouldn’t have a currency of exchange values, and therefore value as the commensurable element of commodities would cease.
Now you’re entitled to your own theories but to read this as Marxs theory is to read him incorrectly.
I don’t doubt grabbers example but again this is mixing together two analytically distinct forms of exploitation. Marx uses these terms in a vet specific sense, and counter examples used in a different sense aren’t real counter examples.
I’m reading the Grundrisse, and I just came across this line where Marx agrees with your tribesman example, without thinking it renders his theory of value and exploitation as incorrect.
“Important to note that exchange between different tribes or peoples – and this, not private exchange, is its first form – begins when an uncivilized tribe sells (or is cheated out of) an excess product which is not the product of its labour, but the natural product of the ground and of the area which it occupies” (Page 170 Penguin edition)
“If everything was automated we wouldn’t have a currency of exchange values, and therefore value as the commensurable element of commodities would cease.”
But we agree that if -in an automated world- the robots would still need oil or gas the Russians or Saudis would still want to sell their resources to the robot- (patent-) owners in exchange for robot goodies. But -if I understood you correctly- you are saying that Marx is saying that in such a world traders wouldn’t have a common measure of value? So they couldn’t reach an agreement how much oil to exchange for how much robot products? (If that’s a consequence of Marx’s theory, I confess it doesn’t sound convincing to me.)
To sum up, for Marx, in your reading, exchange value needs an objective measure of value which only labour time can deliver, use value is not enough because it remains forever subjective (or relative) and therefore incommensurable.
I’ll start with the last paragraph which is a bit mixed up. And this is not ‘my reading’ of Marx, this IS Marx. (let’s bear in mind that you openly confessed to preferring to read Marx as a quasi-Keynesian on your town terms – you’re entitled to do so, but that’s certainly not reading Marx for Marx. Moreover it’s not a basis to criticize Marx from, since you admit already you’re not giving him the fairest shake possible).
We know that we can exchange all kinds of commodities that are different in their use, shape, size, weight, and atomic structure. We know that we use a medium of exchange for this, e.g., ounces of gold. so 1 oz of gold = 1 shirt. And if 1 oz of gold = 2 cups of coffee, then 2 cups of coffee can be exchanged – ultimately – for 1 shirt. (there will be some delay here, in that first I will need to sell my shirt, to get my ounce of gold, to get my coffee). These products all share something that allows for their VALUE to be quantifiable and exchanged in terms of a medium; gold in this case. It’s VALUE that needs an objective measure, and that measure is found in the FORM of money. You’re right that use value certainly doesn’t work. Since the uses for the panoply of commodities that can be exchanged for 1 oz of gold are staggering (3 hats, a key chain, a book, a carton of crayons, etc). That common element, which is the substance of value is socially necessary labor time. What all of these vast and every growing commodities consistently have in common is LABOR. It is quantified in currency which is its exchange value.
If you’re struggling with these concepts – and you seem to be since you have them mixed up – I’d recommend re-reading Capital Vol I Section I. Or watch Brendan’s video which are great.
Your automated world is starting to get overly particular. We’d need to know how the oil and gas was being extracting. By labor? In which case the world isn’t automated. But if our world was ENTIRELY automated, commodities would lease their commodity form, since they’d cease to require exchange value (the form of expression of value as determined by socially necessary labor time).
I’m going to paste Ernest Mandel’s more succinct automated society argument, so rid the argument of fastidious particulars like Russian’s goals…
” third and final proof of the correctness of the labor theory of value is the proof by reduction to the absurd. It is, moreover, the most elegant and most “modern” of the proofs.
Imagine for a moment a society in which living human labor has completely disappeared, that is to say, a society in which all production has been 100 per cent automated. Of course, so long as we remain in the current intermediate stage, in which some labor is already completely automated, that is to say, a stage in which plants employing no workers exist alongside others in which human labor is still utilized, there is no special theoretical problem, since it is merely a question of the transfer of surplus value from one enterprise to another. It is an illustration of the law of equalization of the profit rate, which will be explored later on.
But let us imagine that this development has been pushed to its extreme and human labor has been completely eliminated from all forms of production and services. Can value continue to exist under these conditions? Can there be a society where nobody has an income but commodities continue to have a value and to be sold? Obviously such a situation would be absurd. A huge mass of products would be produced without this production creating any income, since no human being would be involved in this production. But someone would want to “sell” these products for which there were no longer any buyers!
It is obvious that the distribution of products in such a society would no longer be effected in the form of a sale of commodities and as a matter of fact selling would become all the more absurd because of the abundance produced by general automation.
Expressed another way, a society in which human labor would be totally eliminated from production, in the most general sense of the term, with services included, would be a society in which exchange value had also been eliminated. This proves the validity of the theory, for at the moment human labor disappears from production, value, too, disappears with it.”
By calling it “your reading” I didn’t want to imply that yours isn’t a correct reading of Marx.
Now, I don’t agree with Mandel at all. And I think Mandel is not even making your argument. As I understood your argument, labour is needed as a measure of value. No labour, no measure of value, no exchange value.
Mandel is saying something different. First he seems to say there wouldn’t be any buyer because nobody has an income. This seems wrong. Robot owners could sell products to other robot owners.
Then Mandel is saying, that because of general abundance these products wouldn’t have an exchange value. If we forget patents for a moment, he is right that the robot input into production wouldn’t have any exchange value, but my whole point was about natural resources. Since robot products use both robots (which are abundant) and natural resources (oil or gas, which are still scarce), exchanging a product containing 2 barrel of oil for a product containing only one barrel would be dumb. (By the way, wouldn’t energy contained in oil or gas make a good measure of value?) So there would be an exchange value based on the amount of natural resources contained in the robot product.
In such a world workers would starve, owner of robots (if there a no patents) would starve too, but owner of natural resources could exchange commodities based on the energy value they contain. If there are patents (creating artificial scarcity of robots), then robot owners could make a buck too.
Now, if we imagine a world were robots are solar powered, fusion technology could assemble each and every element and virtual reality would allow everybody of us to live in Malibu, then natural resources wouldn’t have any exchange value, I agree.
No you’re still confusing things. Exchange value is the measure of value. 1 ounce of gold is a measure (in oz) of the value contained in a shirt, 2 cups of coffee, etc.
It seems obvious that in our commodified world scarcity is not a good measure of value since everything is produced in staggering abundance. Marxs law of value holds for capitalist society. So scarcity is not what takes two commodities commensurable.
How is anyone selling anything if no one has any income since they aren’t working? What are they using to exchange? First you say robot owners do the exchanging then instead scarcity owners. This sounds like a barter society and not a commodified society. So Mandels right.
If the entire working class was dying unemployed because a guy said “I own this oil site”…. Well he’d be dead. Since he has no money to hire security and to taxes to the cops.
Since you’re still not clear on the nature of value you should really reread Marxs opening to capital.
“How is anyone selling anything if no one has any income since they aren’t working? What are they using to exchange?”
If we forget about patents, robot owners could only make a buck by being owners of scarce natural resources. So lets say one company (using only robots!) produces products out of their oil, the next does farming on the land they own, another one constructs housing at nice places which they own etc. Since the stockholders of the oil fields owning company can’t live from their products alone, they will exchange them for food and housing, the construction company owners can’t live from housing alone so they would exchange them for oil products and food etc. Because of the double coincidence of wants-problem, monetary exchange will be superior to barter, so they will use money.
Money could be produced just like today by a central bank doing open market operations. Let say the central bank wants to keep the money supply constant, so they “print” money and buy some assets (lets say houses) increasing they money supply in case of deflation, or they sell some houses and destroy money in case of inflation.
Where I agree with Marx is that in such a society their would be no growth and no profit. Owners couldn’t do anything to get richer (they could only get poorer in case their natural resources are finite like oil or gas), since robots are abundant, they wouldn’t have an exchange value, so everybody is stuck with what they already had. Inheritance and marriage and war would be the only ways to get rich (Piketty meets Game of thrones). It would be a feudalistic society without robots instead of slaves or serfs. So I agree with you, that I’m not describing a capitalist society. Nevertheless if you read Piketty, it could be that were are falling back into such a neo-feudalism.
“If the entire working class was dying unemployed because a guy said “I own this oil site”…. Well he’d be dead. Since he has no money to hire security and to taxes to the cops.”
They would have money backed by the natural resources they own (in case of patents, there would be a lot artificial scarcity too). But even without money, you forgot Robocop. 🙂
The more you describe this the less it’s an automated society and the more it’s a continually evolving thought experiment to ale your point. There seem to be a lot of people working in this scenario, so it’s not automated.
I think we have made our points. Thanks for the discussion.
Marx stressed the importance of the factors that determine the relative magnitude of surplus-value and of the price of labour-power (s and v). These are (1) ‘the length of the working day,’ (2) ‘the nomal intensity of labour,’ (3) and the ‘productivity of labour.’
How these three factors vary in relation to one another determine the relative share of
total new value produced that goes to the value of labour-power or surplus-value –
loosely, wages and profits. The better part of chapter 17 (CHANGES OF MAGNITUDE IN THE PRICE OF LABOUR-POWER AND IN SURPLUS-VALUE) is an examination of the main relations between these three factors and their effects on the share going to labour-power or surplus-value. This relative share is ultimately determined by ***CLASS STRUGGLE*** over wages and working conditions (p.659). (See also: Phillips Curve)
Given your co-authored article with Kliman and Freeman, I thought you might also be interested in the following critique of Heinrich’s reading of Capital:
‘How not to do another New Reading of Marx’s Capital’
It is a translation from the quarterly journal of Marxist political economy GegenStandpunkt (Opposing Viewpoint) of the Marxist Group (Marxistische Gruppe, MG) which was the largest communist organization of the “New Left” in West Germany.
They have an official website here http://www.gegenstandpunkt.com/english/en_index.html and the Ruthless Criticism website mainly consists of translations from GegenStandpunkt and MSZ journals.
I have sent the translated article to both Kliman and Freeman as well.
Guys, shut up.
It seems like marxists have a hard time explaining their theory to others. They create an astronomical muddle in desperate attempt to project validity in marxist theory, unlike serious economists.
Why can’t you guys recognize that marxism is obsolete in the academic field? The scientific hemisphere requires evidence, and marxists have not presented any since marxism was refuted by the marginalist revolution.
I have a challenge, and I want you all to fill those gaps with practical answers:
1 – Can you mention a practical and observable example of labor creating value? Workers in coffee industries work more than workers at automobile industry. The average labor time in coffee industry is higher, yet, the automobile industry visibly surmounts the other in terms of profit.
This is a refutation of the labor theory of value.
2 – 2014, and profit hasn’t decreased. Why is that?
3 – Why can’t we see marxist economists being rewarded and recognized for their “contributions”?
4 – Why don’t you give up and accept your defeat?
Once again the arrogance of vulgar economics shows its face. Correo, it apparent from your first two questions that you don’t understand central aspects of Marx’s economics. You are behaving in a trollish fashion by setting out strawman positions, not relating your comment to any specific discussion on this post, and making grandiose vague claims with no real content. Either engage with specific ideas from this post or your comments will be deleted.
Correo, first I’d like to point out, in the event courses on Classical Political Economy were not offered or available to you (I know economists today are not interested in the history of economic ideas or in the least interested to learn about the whole discipline of economics predating neoclassical economics but remember there once was a time when the fields of economics and politics were joined) it was not Marx or so called Marxists after him who developed the LTV but Adam Smith, and later David Ricardo the economist of production par excellence.
And second, one of the reasons the marginal utility theory was picked up was because after Ricardo, the LTV was widely adopted by radical economists and trade unionists to support demands that the working class should receive the whole (or at least a much larger share) of the product of its labour because it was labour that supplied the value of products. This interpretation came to mean: if labour produces all, then why should it not receive all? In this form, from the perspective of the bourgeoisie, the labour theory of value became a ‘socially dangerous idea,’ especially if it were to mean that all material goods and services belonged to the working classes that produced them, and the share held by others was somehow due to robbery or fraud. Such ideas were hardly supportive of the status quo. [As a side note, it should be remembered that Marx and Engels cautioned against mixing demonstrable facts with ethics and pointed out that it does not follow from the labour theory of value that the whole product of labour ought to accrue to
the producers]. Third, while we are filling in what your ignorance perceives to be gaps with practical answers (the business departments would probably get a good laugh out of your (economist’s) use of the word practical) when supply and demand are equal, your prized theory fails to explain anything.
Hello, M. I am aware that Marx was not the first idealizer of the Labor Theory Of Value, but thanks for reminding us all. Actually, many economists still don’t know that.
“And second, one of the reasons the marginal utility theory was picked up was because after Ricardo, the LTV was widely adopted by radical economists and trade unionists to support demands that the working class should receive the whole (or at least a much larger share) of the product of its labour because it was labour that supplied the value of products. This interpretation came to mean: if labour produces all, then why should it not receive all?”
That is a reasonable argument, but the objection to it resides in the fact that labor does not produce or supply the products. The business owner is the coordinator of the operation and the idealizer of the whole productive chain. It’s the business owner who sets up ideas and configures the process of creation. Workers receive everything in their hands, they do not go through the mind-eating process of having to organize the productive sector and put the ideas in place. If it wasn’t for business owners, no innovation would befall humanity, our economy would be a stagnant sea.
Also, business owners take the risks of investments, they put everything they have in the battlefield when they start competing in the market, so why should workers (who take no risks) get everything?
Not Marx nor anyone here is saying that workers ‘should’ get everything. What we are saying is that the process of the negation of the negation of capitalist society will be achieved and the necessity for this change may seem to critics like it is posed as a value judgment (comparison between what is with what ought or should be) or as inevitable but in actuality, for this change to be successfully undertaken it requires “the expropriation of a few usurpers by the mass of the people” (Capital Volume One, 1976, Fowkes trans. p. 930). The language Marx employs there is that of necessity and not physical inevitability. Marx speaks in imperative mood of the “centralisation of the means of production and the socialisation of labour [which] reach a point at which they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropiated.”(Ibid., p. 929). But this expropriation can occur only through its being willed by the vast majority i.e. emancipation of the working class has to be the task of the working class itself. So it is implied that as long as members of the working class remain unconvinced of the practicality of this goal the majority of them will remain in the negative condition of capitalist exploitation. Every mode of production had an origin and an end Correro and whether you or I like it or not, this system will at some point be superseded as well. We are the witnesses to an end of an era and a production mode based not on addressing human needs (socialism) but rather on profit (capitalism).
In short, the conflict between opposing views and forces in human society provides the impetus for development. The main vehicle of this development is negative. What undermines existing society is often also what drives it in a new direction. What Marx tried to bring out with his dialectics is the positive forces which lie within the negative.
As a literary side note, a quotation from Goethe’s Faust would be an appropriate motto for both Hegel and Marx, who recognised that without destruction and suffering, human freedom, salvation and the vision could never be had, that is, without the negative, humanity would seek uninterrupted rest.
In Goethe’s masterpiece which both Hegel and Marx read and admired, Mephistopheles himself explains the function of his negativity. To Faust’s question, ‘Enough, who are you then?’ he replies:
Part of that force which would
Do evil evermore, and yet creates the good.
What is it that this puzzle indicates?
I am the spirit that negates.
And rightly so, far all that comes to be
Deserves to perish wretchedly;
‘Twere better nothing would begin.
Thus everything that your terms, sin,
Destruction, evil represent-
That is my proper element
One cannot fail to note how similar the role of negation is in Goethe’s great masterpiece.
Prices do not gravitate towards costs of production, blog writer. Labor is merely a tiny piece in the block of production. In order to edify a commodity and reach your goal, you need to make the factors of production interact. Value is an interaction between capital, labor and inputs.
It would be a pleasure if you allowed me to exemplify the situation: indigenous people in the amazon sell a tree to companies. The value for which the tree is sold depends on the its utility. If a tree has a highlighting particularity that nourishes an essential subjective necessity of the tribe, its price will be higher. How does labor enter into this? It doesn’t. See how subjectivity is an important key to the agents of the economy?
2 men produce the same wine, made up of the same elements.
1 lives in the south of France, where the demand is higher. The other lives in England, where the demand is low. The first will sell the wine for a higher price, because the wine has more value in his location. However, they produce the same wine and put the same amount of work into it.
How can you refute those examples?
I wish you well, dear writer.
I can tell from your supposed falsifications of Marx’s value theory that you attribute certain claims to Marx that I would not attribute to him. Can you state, precisely, what specific claim of Marx’s you believe to be refuting?
The wine example implies that the value of wine has no direct correlation with the amount of work put into it. The value of wine is determined by a subjective phenomenon: people in the south of France value wine more than people of other regions.
This falsifies the basic assumption of labor theory of value.
The tree example holds the same nature: it undermines the marxist assumption that socially necessary labor is an expression of price.
Take a look at this quote: “It is undoubtedly true that labour is a fundamental factor of production for many goods, most notably manufactured goods.
However, it is simply not true that it is the only factor of production: there are 4 recognized factors of production:
(1) natural resources, including land, raw materials, water, and energy.
(3) capital goods, and
(4) entrepreneurship (O’Connor and C. Faille 2000: 63).
Factors of production are the inputs that are combined and used to transform things into goods and services. Labour is undoubtedly a major input, and capital goods and entrepreneurship also depend on human labour to a great extent.”
You have not answered my question: What specific claim of Marx’s do you think is refuted by these examples. State your understanding of the the claim.
Many critics of the LTV have never quite gotten it into their silly heads that, first, labor products have value only on the condition and as a result of the competitive struggle of private producers, and that, second, the average socially necessary labor which is recognized by the purchaser in the act of purchase is not identical, and can not be identical, to the amount of labor actually expended by the producer.
The examples I mentioned refute Marx’s assumption that labor is the source of value, not subjective preferences of market agents.
The wine example shows how values are different even when amount of work is the same, which refutes Marx’s claim that socially necessary labor time is expressed in price.
The tree example displays the importance of subjectivity in mutual exchanges. No socially necessary labor time is considered when indigenous people sell their trees to companies.
Marx’s theory of value is not an assumption. It is a theory which he supports with painstakingly detailed logic. Providing examples of prices diverging from embodied labor time does not falsify/refute Marx’s theory because he does not claim that empirical prices always reflect embodied labor time or that prices empirically gravitate around a center of gravity based on value in the manner that neoclassical theory theorizes equilibrium price. He is making an entirely different sort of theory with his theory of value, not to be confused with his theory of price. All prices are sums of value. See my previous post on Intrinsic Value.
Furthermore your two examples are completely theorizable within the framework of Marx’s value theory, however Marx would not, I believe, have framed the two examples in the way you have or drawn the same conclusions from them. Regarding two commodities (wine) fetching a different price in different places: You have stated/assumed that the difference is a result of differences in demand. However this is merely an artifact of your assumptions about the effect of demand on prices. Based on numerous critiques of market-as-auction theories of price formation (that they are not how markets actually work- see Nicholas Kaldor) I would disagree with this starting assumption. Furthermore, if there is a free flow of commodities between the two locations then prices should tend toward uniformity regardless of local demand. If there is not a free flow of commodities between the two localities then we are just dealing with two different economies and we can’t really draw any falsifiable conclusions from comparing prices between them. Differences in prices could be the result of different costs of inputs, labor rent, transportation… lots of things. Furthermore, Marx’s theory of price does discuss cases there demand can create a rise in price above values. This is not problematic for this theory of value because all prices are sums of value- again see my previous post on Intrinsic Value.
Regarding your tree example. I’m not sure exactly how you are conceptualizing this: are these people selling the rights to the trees or are they harvesting and selling the trees themselves? In the former case then the price of the trees would be theorized through a theory of rent, not commodity price. In the latter case this is obviously just commodity production as with any other labor done on raw materials.
Perhaps your confident refutation is not as air-tight as you believed it to be. Do you really think that Marx would develop a theory of value that could not explain simple, common occurrences like price-value divergences or rent? Do you really think that people would continue to read him today if such simple arguments could falsify his theories? You claim to have read Marx. What specific passages gave you the impression that these simplistic arguments could refute his entire theory of value?
Dear writer, I didn’t mean to upset you. I do not intend to produce conflicts. My main purpose is to engage in a healthy and peaceful debate with you.
The topics I’ve been mentioning are related to your post. It approaches the important subject of the role of labor in production.
I hope you don’t interpret me as an arrogant debater, because that is far from my intention.
I wish you the best.
I’m not upset at all. But I am very busy and have no time or desire to debate trolls. It is obvious from your comments that you don’t know what Marx’s theory of value is about and that you are already confident that it is all a bunch of crap. That means that you are only here to play “gotcha” and make yourself feel intellectually superior. (I believe you are actually doing the opposite: making yourself sound ignorant and arrogant.) So what is the point of wasting my time having a conversation with you when I could be having a conversation with someone actually interested in understanding Marx? I have the old-fashioned point of view that you should actually understand what you are critiquing before you start the critique.
Dear writer, stating that I don’t understand Marx will not clarify or refute my point. If I don’t understand Marx, you should show me why and deconstruct my view, and you have not done that.
I am interested in understanding Marx more deeply. I have read Marx and studied his theory. If my interpretations are wrong, you should point the flaws, otherwise, you won’t be invalidating my argument. Everytime I try to engage in a peaceful conversation with a marxist, they say exactly the same thing you said. They say I don’t understand Marx and I need to study his theory.
Let’s avoid bringing synthetic monophony to the discussion. Accusations will lead us nowhere.
Expose me to your ideological horizon and prove why my views are wrong, I’m willing to accept it. An accurate conductivity of a dialogue is better than insults. I’m not here to compete with you.
I wish you the best.
I can’t explain why you have gotten Marx wrong until you tell me SPECIFICALLY what claim you think your examples have falsified.
For the record, despite your “i wish you the best”, you began your first post with “Guys shut up” and then began to recite the same tired strawman arguments that we hear on vulgar Austrian blogs and the like that have nothing to do with this post. This is not the spirit of someone interested in understanding Marx. I have not insulted you at all, as you claim, other than to say that your comments are arrogant (which they are since they make bold claims to have falsified Marx without even understanding him), and trollish.
“I assume, of course, a reader who is willing to learn something new and therefore to think for himself” (Marx). Might have been just about the only assumption that Marx had made that was not realistic.
Haha, nice one M. Maybe Marx was cynical.
It is sad that a serious scholar such as Marx attracts such people. He foresaw it in the preface of the first German edition:
“In the domain of Political Economy, free scientific inquiry meets not merely the same enemies as in all other domains. The peculiar nature of the materials it deals with, summons as foes into the field of battle the most violent, mean and malignant passions of the human breast, the Furies of private interest. The English Established Church, e.g., will more readily pardon an attack on 38 of its 39 articles than on 1/39 of its income. Now-a-days atheism is culpa levis [a relatively slight sin, c.f. mortal sin], as compared with criticism of existing property relations.”
“If I don’t understand Marx, you should show me why and deconstruct my view, and you have not done that.”
This is logic on its head. So you construct a straw man position and we have to follow you in that and deconstruct that?
If you actually read Brendan’s blog more carefully you could have seen the mudpie video
Hello mMreverpresent. Thanks for expressing your opinion.
It is not evident to me when I constructed a straw man position. Nevertheless, there should be no denial of my enthusiasm in the first comment. Sorry if my lack of value neutrality has caused a discomfort. My reflections are never meant to be aggressive towards somebody else’s opinions, but that doesn’t mean they’re not challenging.
The basic axioms of investigative interpretations dwell in the corporification of academicism, and no debate should abstract such elements.
I admit that I haven’t fully read this blog, but I will surely try to know more about the blogger’s political positions.
Also, I don’t see how the volume 3 of The Capital revoke my examples. I already read this book, but thank you for your suggestion.
Vol3 covers, amongst other things, the difference between surplus value and profit and the way surplus value is redistributed to create an average rate of profit. If one has read and understood this then they would not say as you do, “Workers in coffee industries work more than workers at automobile industry. The average labor time in coffee industry is higher, yet, the automobile industry visibly surmounts the other in terms of profit. This is a refutation of the labor theory of value.”
I think mainstream economists are too busy at the moment trying to refute or challenge Piketty’s empirical findings to give a damn about what Marx or Marxists have been saying for over 150 years. Not that I agree with his political leanings but his conclusions in ‘CAPITAL in the 21st century’ (deliberate allusion to Marx’s great work, Das Kapital. The title, after all, is CAPITAL in the Twenty-First Century, not Capital in the Twenty-First Century) but his central discovery, if we may call it that, is stirring up quite the discussion these days.
Piketty has demonstrated, more or less, that contemporary capitalism is over the long run steadily transferring huge quantities of wealth from the poor to the rich, reconstituting thereby the inherited or patrimonial privilege and power characteristic of Europe in the 18th and 19th centuries. This fact may come as a surprise to ‘professional’ mainstream economists (their academic profession largely exists for the purpose of rationalising this transfer) but it does not particularly surprise those of us who have spent our time reading Marx. All societies exist for the purpose of transferring wealth from those who create it — the poor — to those who do not — the rich.
“1 – Can you mention a practical and observable example of labor creating value? Workers in coffee industries work more than workers at automobile industry. The average labor time in coffee industry is higher, yet, the automobile industry visibly surmounts the other in terms of profit.
This is a refutation of the labor theory of value.”
A refutation? Certainly not, you should read volume 3 (first two parts).
Hello again, M. Your argument is entirely plausible. Notwithstanding, I think it didn’t address my main point.
Sure, antagonism among different forces of society is an indispensable boost of sociocultural transmutation. But I don’t think it’s negative to have opposing points of view, because it brings diversity and enlarges the scope of human thought. I don’t see how that could be negative.
Regarding the fact that every system has an origin and an end, that’s true. However, it has been 200 hundred years of capitalism, and we still can’t find a better system. We can only supplant capitalism when we find a better solution.
“So it is implied that as long as members of the working class remain unconvinced of the practicality of this goal the majority of them will remain in the negative condition of capitalist exploitation.”
– How exactly is the “working class” being exploited? I expressed in my main point that unqualified labor does not produce anything, neither does it supply the products, as some marxists claim.
Workers get everything in their hands, and they just need to make some mechanical movements to in order to finish the process of production. How does that grant them the right to make as much as business owners, who take risks, coordinate the whole operation, innovate and move the economy?
Opposing private property with unjustified philosophical points will trigger no significant effects on the capitalist system.
You have made strawman arguments against Marx’s theory of value based on misunderstandings of what the theory claims. Though I have patiently explained the problem with these arguments you have ignored my response. Instead you are now pursuing an entirely different diversionary line of criticism- questioning the theory of surplus value. Switching topics mid-debate is not honest dialogue. It is more trollish behavior. This blog is not intended for that. I have a post on surplus-value which you are welcome to read if you would like to acquaint yourself with that topic. (As even Bohm-Bawerk admitted, the theory of surplus value springs logically from Marx’s theory of value so if one accepts that his theory of value is correct then surplus value can only come through the exploitation of workers. If you can’t find a problem with Marx’s theory of value you won’t be able to find a problem with the theory of surplus value!)
I know exactly where this ‘discussion’ is going: every time someone patiently replies to a strawman argument you will throw out another unrelated criticism based on an incomplete understanding of Marx. This is a waste of everyone’s time, yours included. Your ‘contributions’ will be deleted in the future unless you can summon-up more intellectual honesty and show a desire to understand.
As per your suggestion I read through the majority of this article, and saw that you do have points which pertain to the concerns I raised in your “Price and Value” post. While in a universe with more time there is more I’d like to talk about, something that is most interesting to me at the moment is this quotation:
“Ultimately, when it comes to society, human labor is the scarcity that matters. Society only has so many hours in a day to produce the commodities needed to reproduce itself. It must apportion these labor hours in such a way that shit gets done. Yes, there is a scarcity of natural resources as well. But this scarcity is measured in labor time! If it takes a million hours of labor a year to produce all the oil society needs then a million hours if the measure of the scarcity of oil”
I have to say that I find this entirely uncompelling. First of all we would see that different “worlds”, if you will, different capitalist societies, would have very different prices, levels of real wealth, and so on. So I don’t see why labor is so categorically different than land (in the economic sense). Both act as an upper limit on production, both are scarce, and they are both needed in the production of all commodities. You say that “society only has so many hours in a day to produce the commodities needed to reproduce itself.”, but in response we can easily say: “It must apportion hours of land usage in such a way that shit gets done.”, and thus measure everything in terms of land. You can argue that this is harder to calculate, but no one has ever needed to calculate the functioning of the whole economy, or more than one industry, in terms of labor time, so what does that matter?
Further, you claim that scarcity is measured in labor time, but by who? Why couldn’t it be measured in land time? Thus, it would seem to me, that the reason why you would focus on labor is that, as I said before, it acts as an upper limit on production, so does land. So I can at least understand an analysis that stems from the “objective” analysis on limits to production, but putting it all on labor seems nonsensical to me.
Note that your claim in the “Price and Value” article that I criticized is still incorrect:
“If we assume a perfect equalization of profit rates and supply and demand are in balance then we can say that price=prices of production.”
In your explanation of prices of production you mention land nowhere, only socially necessary labor time in the form of living and dead labor, but it is clear that processes which use very scarce and valuable land, which don’t require very much labor, could be just as expensive as processes that took much more socially necessary labor time with less efficient land. Marginalist price theory seems to express this brilliantly, while Marxian price theory seems to lose any grasp on an exact pricing mechanism. On that note:
“I believe that the best answer is to consider the alternatives. What would it mean to define capitalism as a ‘mode of consumption’ rather than a mode of production? What would a mode of consumption be? Just as there is no ‘use in general’, no ‘use in the abstract’, there is no general mode of consuming by which we can classify all of the consumptive activities of a capitalist society. We only have specific ways of consuming. Furthermore these are not social relations but relations between individuals and objects. The only aspect of consumption which can apply to all consuming activity is that most consumption in our society is consumption of commodities. This, however, is a definition that requires an understanding of commodity production. It is commodity production that stamps capitalist consumption with its unique character.”
I will be looking at this entire paragraph (I just quoted it to give full context) so let’s look at this in chunks:
“What would it mean to define capitalism as a ‘mode of consumption’ rather than a mode of production? What would a mode of consumption be? Just as there is no ‘use in general’, no ‘use in the abstract’, there is no general mode of consuming by which we can classify all of the consumptive activities of a capitalist society.”
Can’t you say that interpersonal exchange with money is an acceptable criteria for a capitalist society? Or what about a society in which goods and services exchange for money? Note that this has the very nice aspect of working for the best of all worlds, since this includes selling labor and selling consumer goods. One could raise the objection that this occurred to some extent in feudalistic societies as well, but we all know that the same is true of hiring labor. There has probably never been a society of “pure” capitalism or feudalism.
“Furthermore these are not social relations but relations between individuals and objects.”
Usually when economists talk about consumption they imply the purchase of a good for the purposes of using it just as much as they do actually using the good. The relationship between buyer and seller is certainly a social relationship.
“The only aspect of consumption which can apply to all consuming activity is that most consumption in our society is consumption of commodities. This, however, is a definition that requires an understanding of commodity production. It is commodity production that stamps capitalist consumption with its unique character”
Why can’t this be said about buying and selling? The pure feudalist society has direct exchange to the lord of the land. The pure slave society the forcible work by the slave to whatever the master desires. The capitalist society exchange between two parties. I realize that your writing breaks off right where you seem to be preparing to deal with this, but I am still at a loss as to how to answer this.
Finally, the analytic benefit is that if you start off with the entire purpose of production by any one capitalist, which is the point of consumption, then you get a better idea of what drives the production process, shapes any particular process, and why exchange occurs. You can argue that this is included simply in “Socially necessary labor time”, but I think that this covers the issue in the same way that saying “labor is important determinant of price” embodies the LTV. There are still many, many grey areas here that Marxist theory proper (to my knowledge) never touches upon. From the point of consumption, we have to look at what it causes, production, which, if the LTV is correct, will then lead to the LTV as the determinant of certain limits and aspects of production. Indeed, the scarcity of labor ultimately IS an extremely important part of equilibrium price theory in the neoclassical perspective, indeed, it is one of very few determinants, but it does include land, specific preferences (for individual prices), an infinitely fleshed out theory of demand, and in some iterations a more active role of the time component.
Once again, I am very impressed with your work here. You’ve done a great job of rebutting many of the arguments that were supposed to put Marxism in its grave forever, and you do so in a way that’s easily read, if long. I look forward to any refutations of my own points.
You ask “why labor is so categorically different than land in the economic sense.” The only way I can see one saying they are the same is if we only consider labor and land from the one-sided perspective of ‘things that effect the magnitude of price’. If you read through my very brief discussion of rent in this post you can see that Marx does theorize the value of land but he does so within the larger context of his value theory. Rent is understood in relation to the productivity of labor. This is because labor and land, looked at from the perspective of the relations that constitute society are not categorically the same. Value, abstract labor time, is the basic constitutive unit that forms the cellular structure of social interactions.
I think people run into problems when they try to make Marx’s theory of value answer the same questions and have the same priorities of neoclassical economics. His theory of value is not a price theory. It is a value theory. It has a theory of price but this is not its aim. I believe this makes his theory far better and more robust than its modern rivals. But that is a different topic.
You ask how scarcity is measured in labor time. Let’s say I harvest 50 bushels a day in a good harvest but 30 in a bad harvest, both days containing 10 hours of labor. So in good seasons when the crop is plentiful I get 5 bushels an hour. In a bad season, when the crop is more scarce, I get 3 bushels an hour. I think is the only meaningful way to talk about scarcity.
You ask “why couldn’t it be measured in land time?” I have no idea what that would be. Capitalism measures labor in time. It is not a theoretical abstraction. It is a basic fact about the way labor is apportioned and measured by society in capitalism.
Labor is not the focus, primarily, because it acts as an “upper limit of production”, as you say. Labor is the center of the analysis because it is the basic constitutive unit of a capitalist society. The essence of capitalism is the regulation of labor through the value relations between commodities.
Re the statement from Price and Value that price=price of production being ‘incorrect’. It is incorrect if we are talking about empirical market prices that involve other factors that might influence price. But in the context of that video where I am only discussing supply and demand imbalances and equalization of the profit rate then it is a true statement. Rent could change prices. High taxes could change prices. Lots of things could change prices…
You reply to my comment on the impossibility of defining capitalism as a “mode of consumption” by suggesting we define capitalism as a market society. To be clear this is not really a mode of consumption… it’s a mode of exchange. We could define capitalism lots of ways, look at it from many angles, and play the abstract parlor game of abstracting certain properties that apply to all of capitalism. But that is not the point. The point is to identify the essential relations that permeate and define the whole. “Interpersonal exchange with money” doesn’t actually tell us anything about how these things that are exchanged are produced or the social relations that govern this production. In reality a market society only occurs when producers are divorced from their own means of production and have to sell their labor power in the market, thereby making commodity production and commodity exchange the primary means by which people get their subsistence.
“Value, abstract labor time, is the basic constitutive unit that forms the cellular structure of social interactions.”
Yes, but why? From a pure production standpoint all that matters is productivity over time, in which abstract land and labor time are both needed, I’m afraid that I just don’t see why one is analytically different from the other. If it was profitable and possible capitalists would forego production with labor altogether.
“I think people run into problems when they try to make Marx’s theory of value answer the same questions and have the same priorities of neoclassical economics. His theory of value is not a price theory. It is a value theory. It has a theory of price but this is not its aim. I believe this makes his theory far better and more robust than its modern rivals. But that is a different topic.”
And that’s fair, I’m just a little lost at what it’s trying to show, since, to my knowledge, all its economic relevance ultimately comes down to prices (decreasing wages, falling profits, discrepancies between costs and revenues that leads to crisis). You can make fine social theories, but economic theories must all come down to prices and production.
“You ask “why couldn’t it be measured in land time?” I have no idea what that would be. Capitalism measures labor in time. It is not a theoretical abstraction. It is a basic fact about the way labor is apportioned and measured by society in capitalism.”
But the same is true of land. Just as capitalists pay wages over a period of time and contrast this with revenue, so to do they pay rent over a period of time and contrast this with revenue. They are both employed because of their productive capabilities and employed over time. Why are they categorically different from an economic perspective?
“Labor is not the focus, primarily, because it acts as an “upper limit of production”, as you say. Labor is the center of the analysis because it is the basic constitutive unit of a capitalist society. The essence of capitalism is the regulation of labor through the value relations between commodities.”
Why? What makes this “the essence”?
“Re the statement from Price and Value that price=price of production being ‘incorrect’. It is incorrect if we are talking about empirical market prices that involve other factors that might influence price. But in the context of that video where I am only discussing supply and demand imbalances and equalization of the profit rate then it is a true statement. Rent could change prices. High taxes could change prices. Lots of things could change prices…”
No. The statement is necessarily incorrect. Say that we’re working with an extremely productive piece of land that produces 100 bushels of wheat at its maximum capacity of 10 laborers in a year. Meanwhile we have a normal piece of land which yields 100 bushels of wheat with its maximum capacity of 50 laborers in a year. For both of these prices will be the same in equilibrium (output=prices+profit) but in the first case significantly less labor time was put into use. The statement that socially necessary labor time would EVER exclusively determine price with inequalities in land productivity is false.
“The point is to identify the essential relations that permeate and define the whole. “Interpersonal exchange with money” doesn’t actually tell us anything about how these things that are exchanged are produced or the social relations that govern this production. In reality a market society only occurs when producers are divorced from their own means of production and have to sell their labor power in the market, thereby making commodity production and commodity exchange the primary means by which people get their subsistence.”
Well I don’t think any definition of capitalism that you could give would tell you very much about how things are exchanged or produced, neither does the Marxist definition. It is instead the extrapolation from this, the “unfurling” of the implications of this statement that end up telling us anything very relevant about capitalism or anything else. In light of this, I don’t see why the labor definition is any more helpful, because if anything it obscures away from the reason that production is occurring in the capitalist economy in the first place. The exchange definition leads us back to relevant concerns of labor, but it is the desire for monetary (and eventual real) gain that permeates all capitalist processes.
Land and labor are analytically different for many reasons.
1. Land and labor have always been “factors of production”. But it is only when production becomes production for exchange that the product of labor becomes a commodity and value relations begin to regulate a social division of labor. It is this new type of labor that transforms the system into a commodity producing system. This new type of labor requires the expulsion of workers from their own means of subsistence and the reorganization of labor through wage labor. etc. It was not a transformation of the relations of the land that led to the rise of capitalism, it was this new form of labor.
2. The productivity of land ceases to be a determining factor in all capitalist production. It only remains a major factor in agriculture. The productivity of industry depends on the built-environment and machinery. It is a socially created productivity, not related to rent or land. Sure capitalists pay rent but this doesn’t mean that the land is having an effect on the productivity of their machinery. Rather, rent becomes subsumed under capitalist relations of production. This historic change was mirrored in the decline of the Physiocratic School and the rise of the classical political economy.
Furthermore, there is no ‘abstract land’ as you say, only specific land. Also, a theory of value based on labor time yields different predictions of the relation of productivity to value than the sort of ‘physical productivity’ theory you are getting at. A theory of value based on labor time predicts that unit prices fall as productivity rises. A physicalist theory, in which land or machines create value, does not yield this prediction because it understand value as merely the production of physical units. This does not yield the prediction of falling unit values with rising productivity. Since falling unit values with rising productivity is a constantly occurring phenomenon this strongly suggests the superiority of Marx’s value theory over physicalist theories.
Re. ‘economic relevance’ and prices.
I agree that price theory is important. Marx has a price theory and I think it works. But it is not the goal of his theory. The neoclassical tradition has progressively narrowed the scope of economic theory over time until economics is left dealing with very few of the questions and issues it started with back in Adam Smith’s time. I think this, along with many other problems in mainstream economics, is a real tragedy.
Re. socially necessary labor time and different productivity of land. You merely give an example where different agricultural firms have different levels of productivity based on differently endowed land. Socially necessary labor time, which is an AVERAGE productivity in an industry, would be set by whatever the modal firm was. Just as in non-agricultural production the level of technological development determines the SNLT here the productivity of land and technological development would determine the SNLT. What is the problem? How does show that price doesn’t equal price of production? I think maybe you have misunderstood the theory and thought that somehow SNLT was independent of the level of productivity of labor. SNLT is a measure of the productivity of labor! You are missing the whole point!
“1. Land and labor have always been “factors of production”. But it is only when production becomes production for exchange that the product of labor becomes a commodity and value relations begin to regulate a social division of labor. It is this new type of labor that transforms the system into a commodity producing system. This new type of labor requires the expulsion of workers from their own means of subsistence and the reorganization of labor through wage labor. etc. It was not a transformation of the relations of the land that led to the rise of capitalism, it was this new form of labor.”
It is false to say that labor markets did not exist before the age of capitalism. Labor markets have existed to various extents in all societies throughout time. Land was just as, if not as rarely exchanged as labor was before the dawn of the early modern era. The concept of any sort of perfect feudalist or pre-capitalist era is bunk. Second, both the status of the common person (modern worker) and land were passed down from familial ties.rather than engaged in direct exchange. Finally, even if the defining feature of capitalism was the sale of labor, this would not necessarily influence the role of land. The way that components of a chemical reaciton, for instance baking soda and vinager, are quite different when left apart then they are when together. Capitalism would be highly impaired from its normal state if either land or labor weren’t saleable. I am not contesting that labor is more important, but it is not, by itself, the defining fundamental characteristic of all capitalist production.
I agree that the decline of the physiocratic school was in large part due to the declining relative importance of land and the increased importance of labor, although I feel that both of these paled in comparison to the increased importance of advanced systems of capital arrangement in market economies. Nevertheless, the physiocratic system seems, at present, to be the overall best economic analysis that occurred until neoclassical economics was born. This is because the physiocrats went all the way with the analysis of land productivity. The basic assumption of the iron law of wages held all the way up to Marx, and as long as it hold land is the master resource, and it is land that determines how much labor can exist, since it is the “scarcer” resource. I would be happy to be shown that Marx’s economic analysis is superior to the physiocrats, but right now it seems even inferior to the classicals in his neglect of land. I feel that I have to be getting something wrong about this, since Marx both extolled Quesnay and was an exceedingly well read man, but your representation of Marxism is not filling me with confidence on this score.
“Furthermore, there is no ‘abstract land’ as you say, only specific land.”
I don’t see why this could not be said of labor. I agree that land is MORE specific than labor is, but nevertheless, I cannot be put up to the same work as the average laborer, and the average laborer could not be put up to the work that I do (what, with my dashing good looks and sparkling intellect). Ground land could certainly be viewed as abstract and non-specific. Certainly you could attach averages to all sorts of land. Even if it were not possible, I think that this just shows the irrelevance of such a concept when applied to labor.
“Also, a theory of value based on labor time yields different predictions of the relation of productivity to value than the sort of ‘physical productivity’ theory you are getting at. A theory of value based on labor time predicts that unit prices fall as productivity rises. A physicalist theory, in which land or machines create value, does not yield this prediction because it understands value as merely the production of physical units. This does not yield the prediction of falling unit values with rising productivity. Since falling unit values with rising productivity is a constantly occurring phenomenon this strongly suggests the superiority of Marx’s value theory over physicalist theories.”
This is clearly false. If we define value as “the socially necessary land time” needed in production, then clearly if less land time is needed per unit the value of each unit falls. Once again you fail to draw any inherent distinction between land and labor.
“Re the statement from Price and Value that price=price of production being ‘incorrect’. It is incorrect if we are talking about empirical market prices that involve other factors that might influence price. But in the context of that video where I am only discussing supply and demand imbalances and equalization of the profit rate then it is a true statement. Rent could change prices. High taxes could change prices. Lots of things could change prices…”
But I wasn’t talking about empirical market prices, I was talking about equilibrium market prices, which I have to assume is what you are talking about as well. In order to assume that prices would EVER equal just their socially necessary labor time in dead or living labor you have to assume that land is either not used or it commands no price. The first case is absurd and the second case can be demonstrated to be wrong in any sort of equilibrium scenario. The statement is still wrong.
“Re. socially necessary labor time and different productivity of land. You merely give an example where different agricultural firms have different levels of productivity based on differently endowed land. Socially necessary labor time, which is an AVERAGE productivity in an industry, would be set by whatever the modal firm was. Just as in non-agricultural production the level of technological development determines the SNLT here the productivity of land and technological development would determine the SNLT. What is the problem? How does show that price doesn’t equal price of production? I think maybe you have misunderstood the theory and thought that somehow SNLT was independent of the level of productivity of labor. SNLT is a measure of the productivity of labor! You are missing the whole point!”
But in this case the yield is not higher than the productivity of labor but of land. If labor yields 100 units with all other units of land, but that same labor produces 200 with this special land, then it is clearly the rising productivity of land and not of labor that is causing the increase. With this in mind the total prices for this firm would be HIGHER with no extra SNLT, indeed, the rising price is consistent with a radical DECREASE in SNLT. That you don’t seem to understand this leads me to once again believe that the marginalist conception of productivity really is essential and something that, over one hundred years later, is still lost on the Marxist paradigm.
To clarify, my claim is not that prices don’t equal the costs of production, but that the costs of production are ultimately determined, in equilibrium, by the productivity of labor AND land, not just labor. This is only false if you arbitrarily assume all productivity to be reducible to labor. If you do this you must have an analytic reason for excluding land, to which I see none, and which seems to entirely divorce this theory from logical correctness, in equilibrium analysis or otherwise.
“It is false to say that labor markets did not exist before the age of capitalism.”
Good thing I did not make that claim. I am talking about when production for exchange becomes the dominant form of production.
“The way that components of a chemical reaciton, for instance baking soda and vinager, are quite different when left apart then they are when together.”
This gets to the heart of our disagreement. Look for a future post on Evald Ilyenkov.
claim that there can be abstract land. What makes something abstract?
see a future post on this topic.
Re ‘socially necessary land time’. How do we measure land in time? The example you yourself give (“if less land is needed per unit”) is not a measure of time. It is a measure of one physical quantity to another. Perhaps you could argue that on certain land production occurs faster than others. But this would certainly not be a universal aspect of capitalist production. And it certainly would not be something that could be increased in response to value signals. So it could not become a socially necessary average. Rather it could increase the turnover time of capital, something very different that creating value in Marx’s theory.
“But I wasn’t talking about empirical market prices, I was talking about equilibrium market prices, which I have to assume is what you are talking about as well.”
See what happens when we assume things?
Rent, for Marx, is a deduction from surplus value, just like credit and merchant capital. Thus he theorizes surplus value and then price of production (which is not an equilibrium price in the modern sense of the term). Then he goes on to discuss the division of surplus value amongst various parts of the capitalist class (landlords, merchants, bankers.)
“If labor yields 100 units with all other units of land, but that same labor produces 200 with this special land, then it is clearly the rising productivity of land and not of labor that is causing the increase.”
You don’t understand the concept of SNLT. What do you think happens when a capitalist produces below the SNLT by investing in new labor-saving technology? This is the same situation. The new machinery allows labor to be more productive, creating more product with the same amount of time. Because value is set by SNLT and not individual production time, this firm sells goods at the SNLT even though the individual value of the goods is lower than before. The firm accrues a super-profit by appropriating value in exchange.
If machines are more efficient or if land is more productive, it doesn’t matter. It’s all expressed in relation to the productivity of labor. Sure other theories theorize these ‘factors of production’ in a different way. But just saying “there is another theory for how these parts fit together” is not a critique of Marx.
“Good thing I did not make that claim. I am talking about when production for exchange becomes the dominant form of production.”
So is indeed being an exchange economy the basis of capitalism? If this is the case then labour markets are not its basis, instead it is indeed the exchange criteria that I have been pushing for in our discussion. You claim that it is labour that becomes a commodity in the economy after this happens, but why isn’t the very same true of land? I’m afraid that I still fail to see the analytic difference that you’re drawing.
“Re ‘socially necessary land time’. How do we measure land in time? The example you yourself give (“if less land is needed per unit”) is not a measure of time. It is a measure of one physical quantity to another. Perhaps you could argue that on certain land production occurs faster than others. But this would certainly not be a universal aspect of capitalist production. And it certainly would not be something that could be increased in response to value signals. So it could not become a socially necessary average. Rather it could increase the turnover time of capital, something very different that creating value in Marx’s theory.”
Fair enough about the definition, but if we were, for instance, to look at productivity per square foot, then the problem is solved. For instance, the socially necessary time land needs to be used in production in order to produce a good. In many cases there is a trade-off between land and labour. The most obvious is in agricultural processes where you need more land to perform various processes, but at the same time you probably have decreasing returns to labour in many industries if you simply add more labour and capital without at the same time adding additional land. Therefore, once again I see no analytical difference from an economic perspective. From a sociological perspective there are many differences, but that’s obviously not what we’re trying to achieve.
“Rent, for Marx, is a deduction from surplus value, just like credit and merchant capital. Thus he theorizes surplus value and then price of production (which is not an equilibrium price in the modern sense of the term). Then he goes on to discuss the division of surplus value amongst various parts of the capitalist class (landlords, merchants, bankers.)”
Okay, then I think that this means that our disagreement on this point ultimately comes down to the usefulness of the concept of socially necessary labour time, which we’re dealing with elsewhere.
“You don’t understand the concept of SNLT. What do you think happens when a capitalist produces below the SNLT by investing in new labor-saving technology? This is the same situation. The new machinery allows labor to be more productive, creating more product with the same amount of time. Because value is set by SNLT and not individual production time, this firm sells goods at the SNLT even though the individual value of the goods is lower than before. The firm accrues a super-profit by appropriating value in exchange.”
I think that the land case shows the irrelevance of socially necessary labour time. The only way that this concept is useful is because labour is indeed a finite resource that limits what we can produce, but within this definition we assume the quantities of land and capital as given, even though in the economy they are of course scarce factors of production that also limit our production. What is it about labour that is special? The claims that you have provided thusfar are that labour is a universal part of capitalism, which is irrelevant because so is capital and labour, and that wage labour historically what made capitalism capitalism, which is something that I have challenged from a historical perspective and which I argue makes no difference analytically, since different systems behave differently depending on what other aspects of the system are doing. Fundamentally, the only thing that land appears not to do is to create “value” which is true by definition since value from a Marxist perspective is defined as being created by labour. Once more, I fail to see the analytic significance of doing this from the viewpoint of an economist.
What I find most disturbing about the usage of SNLT in the Marxist manner, is that apart from obscuring very important parts of the capitalist process in the short run and the long run, and that itself there are productive processes which involve far less SNLT which are far more productive than ones that do not.
Um hi. I don’t if this post belongs here, but this post was the one that inspired this inquiry, and I don’t know where else to put it. Sorry in advance if that’s breaking organizational rules, or something. I mean no offense. Also sorry that this is sort of tangential to the subject of this post. I don’t mean to pull focus or distract from the original topic.
This post raised some questions for me about the substance of value in the context of urban housing and homelessness. I’m working with a group trying to end homelessness in Hartford, CT, and in my studies I have found that there is shockingly little in Marxian political economic theory to explain homelessness. I’ve been thinking about what such a theory would look like. I was hoping I could say the ideas I’ve had surrounding those questions, and someone among you intelligent experts of Marxian political economic theory could tell me what they think of my preliminary ideas before I go any further. Is there any value to them, or am I just drawing ideas from a completely wrong understanding of key Marxian concepts surrounding value?
To start with, a theory of homelessness would have to explore the political economy of urban housing. Unfortunately very little has been done here. Marxian rent theory is tailored particularly to agricultural land, and very little has been done to apply it to urban housing. But there does seem to be some consensus over the fact that urban housing should be considered from both the perspective of rent as well as from the perspective of a commodity. I agree with this consensus. It is important to consider housing from the perspective of rent for obvious reasons. So too is it important to consider it from the perspective of a commodity for equally obvious reasons. But since the Marxian theory of rent is an entirely different monster which I still know little about, I am going to leave it aside for the moment and focus instead on the commodity aspect of housing. I’d also like to draw a distinction between housing ownership and rental housing; what the nature of this relation actually is I have yet to fully flesh out. But for now I’d like to concentrate only on rental housing. A rental house is a commodity because it is the product of the labor of the construction workers; it therefore has value and is thus a commodity. But the question is whether or not a house is a commodity within the confines of the landlord-tenant relation?
Kapitalism101, in your post about labor as the substance of value you said that certain objects can have exchange value but not value; such objects were those that were relatively independent of production (i.e. land). Thus the need for a theory of agricultural rent independent from the commodity. But a house is a direct product of human labor; there is no relative independence here. Yet that value is not being expressed in the relation between landlord and tenant; after all, neither the construction workers nor their manager are seeing any of that value coming back to them as profits, surplus value, or wages. The house, I believe, is a middle ground between commodities with value and exchangeable goods without value; it slips through the cracks because it clearly has value, but within (and solely within) the relation between landlord and tenant, that value is not directly the source of labor.
So the question I asked myself is where is this value coming from and what is its nature? To answer that question, I asked myself whether the value being expressed is new value at all, or merely residual labor-value? Certainly there is residual labor-value in the house—it was constructed after all. But I just don’t see how that alone is enough to explain the surpluses a landlord can extract from their tenants, particularly since the initial labor has long since been removed from the circulation process, and so isolated from the landlord-tenant relation. The construction of the house is already presupposed in their interactions. I believe new value must be being created. A house to a landlord is, after all, a form of fixed, constant capital; value must be being created within its walls, but the nature of that value is clearly not labor. So what is it?
Drawing on Ricardo, it seems that Marx believed that all value ultimately originates from human beings; only humans can create value. Thus human labor (or, more specifically, socially-necessary labor time) constituted the substance of values of produced commodities. If this is true, perhaps it is human life itself rather than human labor that is being represented in this particular value-form? Or, more specifically, the capacity to live. Perhaps, instead of their surplus labor, it is their surplus life that is being sucked from them for the purpose of profit!
Before anyone says anything, I do not believe this would in anyway contradict or disprove the labor theory of value. As I said before, both presume humans as the original creators of value. It’s just that in the productive sphere that value represents man’s labor, whereas in the non-productive, living sphere, the value represents human life itself. This would supplement the LBV, not disprove it.
If this theory holds any water, a whole range of exploitative and alienating interactions could be drawn out to explain the relation between landlord and tenant. To name just one, the tenant’s lack of ownership makes it all the more easy for landlords can kick their tenants to the curb and find someone else in desperate need of housing. This might mean that a reserve army of homeless is required to keep the low-cost-housing market going.
Again, and as you can tell, these are just the youngest and most preliminary ruminations of a theory that I am thinking about developing. I thought I’d put them out here and see if I’m thinking about this wrong way. Perhaps I am. Am I trying to pigeon-hole housing into a conceptual schema fitting only for productive commodities (that is, commodities that are produced through labor)? I am curious to know what others better versed in Marxian political economic theory think.
Ah crap! If only there was an edit function here! Sorry, when I said that the house “slips through the cracks because it clearly has value, but within (and solely within) the relation between landlord and tenant, that value is not directly the source of labor” I meant to say that the value is not directly COMING FROM labor. Sorry for the confusion.
I asked a question on one of the other pages referring to the potential machine source of value, I should have explored the other pages such as this draft first I suppose. Difficult topic. One of the first “problems” referenced to, when Marx arises with a discussion with a lay-person (including myself). Guess I have a lot of reading to do.
We all have a lot of reading to do. However I don’t think I answered the question well on my “labor as substance of value” post. I will have to do a better job in the future. I think the short answer is that machines cannot produce value because they are not people. Value is a social relation. Machines are caught up in the social relations between people because they are the product of labor and also act as an objective force of capital, enforcing socially necessary labor time on the worker. However, machines are not people and they don’t stand in a social relation to people as actual subjects confronting other subjects. As Marx remarks in chapter one of Capital, “not an atom of matter” enters into value. Value is not merely an index of the physical productivity of the labor process. This is why mechanization leads to falling unit values of commodities. Differentiating people from machines allows Marx to identify the distinctive roles of people and their alienated product (machines, etc.) in production, both the way machines serve as a tool of capital’s domination of the worker and the way revolutions in the productivity of labor through the use of machines leads to revolutions in the values of commodities.
You say, “I think the short answer is that machines cannot produce value because they are not people.” This is a Petitio principii, otherwise known as begging the question. It is only true if you assume that value comes from labour. If, on the other hand, scarcity and utility are the source of value, is there a good reason why robots made by robots could not produce value? So we are back to a proof of Marx’s “Law of Value”. And as you aptly say, “Without a theory of value Marx could not have explained the phenomenon of surplus value which defines the class relation between capitalists and workers. Without a theory of value Marx would not have been able to understand the role of money in capitalism and to argue against the money-reformers of his time. Without value theory Marx would have been unable to theorize the recurrent crisis tendencies of capitalism. The list goes on and on. Value theory sits in a central place in Marx’s universe of thought.”
You constantly refer to “marginal utility theory” and Walras as if this were part and parcel of Walras’s theory. Au contraire, the germ of Walras’s critique of both Ricardo and Marx comes from his father’s theory of “rareté” or scarcity. His critique of Ricardo is in Lesson 38 of the Elements of Pure Economics and his critique of Marx’s version of the LTV begins on page 149 of the English translation of his Studies in Social Economics. You are clearly an expert on Marx. Bravo. But you don’t seem to have read Walras. You should note that he considered himself a socialist by virtue of his “theorem” that land is public by “natural law.” You have done a careful analysis of Mises’s arguments elsewhere here. I would be delighted to see you approach Walras’s actual writings with the same thoroughness.
Very sorry to see your exchange with Neodoxy break off. It was just starting to get interesting!
Yes. Of Course it is begging the question. This is my whole point: the analysis must start with Marx’s derivation of labor as the substance of value not with a comparison of machine output to human output. If we are just looking at the use-value output of humans and robots there is not substantive difference, in use-value terms. If we are talking about the value-output of humans and robots there is a substantive difference but only one based on a prior theory of value.
sure maybe one day I’ll read Walras…
In my comment I referenced your analysis of Mises. Sorry bout that. I meant your critique of Bohm-Bawerk above.
Brendan, one thing is for sure: the tendency of automation is increasing rapidly and will surely take over the economy. A diversity of jobs, including intellectual, are going to have their productivity boost, which will reduce the demand for human labor and will constitute a new stage of development in which will change the way we learn and interact as a society. Of course, the agents of the economy are not unprepared to this, they are smart. They know that if people are too poor and don’t possess the means of enjoyment they’re more likely to promote an insurgency. That’s why new ideas of basic income, rights to housing and food and health are going to have to be introduced in order to assure that people can live a comfortable life and be wary of radical revolutionary movements.
I don’t know why people still think that only human labor can create profits. Nobody has ever explained clearly what surplus value is. If profit derives from surplus value, machines can and already do serve for that purpose. If this wasn’t the case, businesses wouldn’t be introducing and investing on them. That’s like saying capitalism is forever dependent on human labor, which is far from the objective and concrete world.
Machines have been introduced into the process of production before that did the work that others did before and thus made unnecessary several jobs in the workplace. As is clearly evident, the introduction of said machines, said means of production, led to nothing more then the reduction of the socially necessary labor power required to produce the commodities being produced, subsequently lowering their value. Regardless of whether machines take over one aspect of the workplace, the value of the work those machines do is represented by the labor undertaken by those that constructed the machines, designed them, installed them, and presently maintain them. Thus, the value of the work said machines do is determined by the amount of labor required to keep the machine running, just like tools in a workshop or an assembly line.
It is because of the fact that even with the introduction of machines which take over some of the functions of the workplaces have their value determined by the amount of labor required to produce and maintain them that the theory that surplus value can be created by machines in themselves is incorrect. If, theoretically, given enough time, the continual automation of the means of production turned the economy into one gigantic automaton designed to serve human needs, then the machines would be the producer of value, but not surplus value. If commodities still exist in this scenario, then all of them would be rendered completely worthless as no human labor was required to produce them. They would, of course, maintain their use values nonetheless.
A human laborer is unique in the aspect that they do not need to be paid what they are worth in order to create the full value of a commodity. Labor power is the only commodity which may be bought for less then it is sold given the correct circumstances (private property, a capitalist ruling class, etc.) A worker needs only to be paid his means of subsistence in order to produce all that one who made the full fruits of their labor would create. Thus it follows that human labor power is the only commodity which can produce a surplus: which can be more than it is worth. Thus it is the only commodity which produces surplus value.
Capitalists introduce machines into the workplace so as to increase the amount of product that they produce and thus create an additional profit for the short period before the price of the commodity they are producing matches with the labor power required to produce that commodity. When a machine is introduced into one workplace that reduces the labor power required to create the commodities that that workplace is producing, it nets a larger profit for the capitalist for a time because he is selling his commodities for the same price as he did before, but with more of them. When his machines are introduced into the workplaces of other capitalists, they subsequently seek to undersell the capitalist who initially introduced the machine, thus reducing the price of the commodity to the amount of labor required to produce it.
Your argument is very convincing and substantiated. It made me untie some of the knots that were confusing me in regards to the theme of automation from a marxist perspective. I think the marxist conceptual framework about automation needs more exposure and maturation, so it can minimize the contradictions and doubts surrounding it.
From what you’ve said, I can now see that:
– machines have a strict and exact length, production capacity and predictability, unlike human labor, which is more flexible.
– the value (social relation resulting from society’s productive organization) of the work of machines is REPRESENTED by the labor of those who constructed, designed and installed them, even if said processes required the usage of other tools and technologies.
However, you compared machines to tools in an assembly line and this is one point in which I disagree with you. Tools are designed to be directly controlled by humans. They help a worker tighten a certain bolt, but the job is still performed by a human. However, many machines today work by themselves (they’re automatic), you just need to press some buttons to keep them functioning.
By 2030, 50% of the jobs are expected to be automated. In your opinion, will that imply massive unemployment or not? How will this shake the future of capitalism? Is it reasonable to say that if such thing happens, capitalism will not be threatened as it is now, because automation will require skilled laborers, which are high-paid and need to be constantly enhancing, upgrading and developing their education?
Thanks for elucidating this issue. Your argument was very instructive.
Machines are the same as tools, they are both designed to be controlled by humans, whether physical or mental labor is involved in the process. If a machine is run solely by the pushing of buttons, then it is the intensity of said button-pushing that will determine the value of the commodities produced. The maintenance and production of said machines will also play a factor in determining the value of the commodity. Unless the entire process of designing, operating, and maintaining the machinery is completely automatic and there is absolutely no human input whatsoever, then human labor will continue to be the sole determinant of value (with some exceptions, as was shown in the above article.)
Unemployment, to my understanding, happens because hiring workers is not profitable enough for the capitalists. In addition, unemployment is also a tool that keeps a reserve army of workers which allow the ones presently employed to be quickly replaced, and thus keep the working class in competition with one another and thus divided and unable to challenge the capitalist. The continuous introduction of machinery into the workplace and the progressive automatization of productive processes increases the organic composition of capital (the ratio of means of production [machines,] to living labor,) thus causing the rate of capitalist profit to drop over time. A capitalist cannot exploit a machine, by very virtue of the fact that you can buy no commodity for less than it is worth (unless it is labor power or there are temporary fluctuations in supply and demand.)
As the rate of profit decreases, it becomes less and less profitable to have any production at all, due to the fact that the capitalist would not net a great enough profit to stay competitive in the market. Thus, instead of building workplaces, capitalists hold onto their money and do not invest because they do not see adequate returns for their investment. If new workplaces are not created and automatization continues, then people will become progressively more unemployed over time and capitalist production will begin to break down. Values, whether they be use-values or exchange-values, do not appear out of thin air, they must be produced. Money cannot buy food if there is no food being produced.
Given enough time, these contradictions would cause capitalism to stop working completely. No capitalist would invest and no production would happen because there would be literally no profit. Profit comes from the exploitation of surplus labor power, and there is no surplus labor power exploitable from a machine.
If predictions are accurate, in a distant future, robots will be able to produce other machines, fix them and perform a variety of tasks without any human interference. I can’t foretell/foresee the results of such social, economic and productive organization, but some would assume this would aggravate concentration of wealth and others say this will cause the end of capitalism, because there would be no jobs or profits, and the only way out would be everything being produced to satisfy human needs. If the latter theory is accepted, then, it is viable and feasible to presume that revolution is unecessary and society only needs to wait for technology to evolve capitalism away. Of course, it is a very distant reality, but the instruments and vehicles to achieve it are already on development, hence, I think marxists should start to rethink, redefine and reconfigure their perception of society’s productive relations. As I said, by 2030 (not a remote reality), many jobs will be automated and workers will have to be displaced, which may seed a class uproar, but if they do nothing and just wait for technology to do everything, it’s going to be harder for them to employ a powerful strategy to bring significant transformations.
Although the blog’s author isn’t a great admirer of David Harvey, in my opinion, he is a great theorist, because he has a very respectable method adjusted to approach modern capitalism and its prospects. He proposes that capitalism can survive its contradictions, but the costs of doing so would be unacceptable.
I agree with your point: Full automation is not just likely to happen but it is one of the driving forces of capitalist value creation. However as you point out, some believe this will lead to greater aggregations of wealth in the upper classes. “Capitalism may survive its contradictions but the costs of doing so would be unacceptable”. I think this is the key point here. There is this ideology of the free and purposeful individual in modern society. I am more skeptical of this, and not only because of Marxist theory, medical science also supports the notion that human beings, their actions and choices included, are much more complicated and intricate than that of a simple individualistic model (The completely rational economic agent, that economists love to use). Human beings are not an abstraction independent of the reality they reside within. They still operate within the laws of cause and effect. Sure an “evolution” of capitalism isn’t something to be completely disregard yet I am skeptical of this notion. The reason being, when the constant capital amassed is owned by the few and there is now little need for variable capital to be employed (Except for perhaps forces to oversee and protect this amassed capital) Well this will cause reactions, likely revolutionary ones. Note that I do not believe that revolutions have to be intrinsically violent. Yet this of course depends on the stance and actions of the oppressor as well as those of the oppressed.
Your remark was very relevant, and it’s still important to stress Marx never said that capitalism would destroy itself alone. Capitalism is a productive activity resulting of factual social, economic and political interactions. Humans make their own history and if they’ve created capitalism, they can end it, even if they didn’t choose the circumstances which they live under right now.
Also, as I pointed out, marxist thinkers needs to mold, re-shape and adapt their theoretical conceptions to the nascent societal organization, since the means, vehicles and instruments to fully achieve it are already on development. The most important and vital issue is value, since it is the basis to understand capitalism and its engines.