March 10, 2019 (1400 words)
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What does it mean to say 'labour is the source of all value'? Why does Marx promote the labour theory of value, when a 'corn theory of value' would be just as mathematically valid?
Tags: class-struggle
This post is day 69 of a personal challenge to write every day in 2019. See the other fragments, or sign up for my weekly newsletter.
For whatever reason, the Stanford Encyclopedia of Philosophy entry on exploitation does not appear to be written by Marxists, and it shows in the writing. (One of the authors is a self-identified bleeding-heart libertarian). I would have expected an encylopedia to be a little more neutral, but if you treat the text as an anti-Marxist polemic rather than an unbiased overview of exploitation, it’s quite illuminating:
Marx’s theory of exploitation appears to presuppose that labor is the source of all value. But the labor theory of value to which Marx and early classical economists subscribed is subject to a number of apparently insurmountable difficulties, and has largely been abandoned by economists in the wake of the marginalist revolution of the 1870s […] the labor theory of value appears to be unable to account for the economic value of commodities such as land and raw materials that are not and could not be produced by any human labor. Finally, and perhaps most fatally, Marx’s assumption that labor has the unique power to create surplus value is entirely ungrounded. As Robert Paul Wolff has argued, Marx’s focus on labor appears to be entirely arbitrary. A formally identical theory of value could be constructed with any commodity taking the place of labor, and thus a “corn theory of value” would be just as legitimate, and just as unhelpful, as Marx’s labor theory of value (Wolff 1981). Therefore, if, as some have alleged, Marx’s theory of exploitation is dependent on the truth of the labor theory of value, then a rejection of the labor theory of value should entail a rejection of Marx’s theory of exploitation as well (Nozick 1974; Arnold 1990).
What they’re saying is that the “labour” in “labour theory of value” can be replaced by pretty much anything else, via what amounts to algebraic substitution.
There are a number of reasons why this is a bad argument. The first has to do with what appears to be a domain misunderstanding. The labour theory of value does not originate in a mathematical context, where someone is trying to find the right “x” to fit into the phrase “x is the source of all value”. The context for the labour theory of value is social theory, or political theory - a study of social systems created by human beings. It’s not a statement made in the field of corn social studies. To say that Marx’s focus on labour “appears to be entirely arbitrary” is a nonsensical gotcha, because focusing on labour (defined as the social relation relevant to this theory) is literally the whole point of this field.
With that technicality out of the way, I should specify why I think there’s a relation between labour and value in the first place - as in, why is the labour theory of value a good theory? Why should we attribute “value created” to the work done by human beings, rather than that of animals or natural resources or land? When a corporation produces a product by processing raw materials in a factory built on a particular plot of land, with human employees, why is it that only the human employees are considered to have created value? And why is it that only human beings are considered to be exploited?
The answer is so obvious that I feel almost silly typing it out: because human beings are the only ones who understand value. They’re the only ones who get paid, and so they’re the only ones who have the possibility of being underpaid. Cows, corn, plots of land - none of these entities have any need for currency, or even understand what it means.
The labour theory of value is (in my interpretation, anyway) a statement about the cognitive aspects of capitalism, in the sense that you need a certain level of understanding to be able to participate in it as an actor with real agency. You can offer a cow as much money as you like, but they are not readily roped into behaving like capitalist subjects, and I don’t think training them to be full participants in capitalism is anyone’s priority. Corn is even less capable of understanding money. Land is inanimate.
But since cows, corn and land can all be factors in the production process, why should we disregard their contributions? In my reading, the labour theory of value isn’t so much about disregarding their necessity in the production process as recognising that they are not relevant to the creation of value, in the capitalist sense. Cows, corn and land are not active participants within the capitalist system; they have no use for money, and so they must necessarily be excluded from any discussion of where money is created (and, accordingly, who deserves it). After all, if a production process requires cows as input (e.g., for their milk), money never goes to pay the cows directly - it goes to pay the people who feed them, milk them, etc. Same for corn.
It’s a little trickier when it comes to land. Rent costs are not paid to the land itself, buried in the ground or burned in some sort of offering; they’re paid to the people who, for some unfair reason, have property rights to that land. But there is no obvious candidate for the human beings who maintain this land the same way there is with cows or corn, because property rights are much more amorphous: enforced by a variety of institutions dispersed throughout society, and ultimately backed by the threat of violence. Property rights for land are a mechanism for (undeserved) value extraction, not a construction of human beings who deserve some of the value created - a Marxist worldview would prefer them abolished, which is why land doesn’t feature in a labour theory of value.
The last point I’ll make about the labour theory of value is that (at least for me) it’s deliberately meant as a moral statement, not a mathematical truism. It’s an assertion that the human beings who milk the cow or pick the corn or whatever are the real source of the wealth created from selling milk or tortilla chips, and that anyone who extracts value through property rights (in a general sense, owning the means of production) is stealing from the workers. It reflects a political choice to appreciate (I almost wrote “value”) the workers who sell their labour-power in exchange for wages.
That’s what it means to say labour is the source of all value. It begins from the assertion that workers, as a class, are almost never going to be paid as much as they deserve, as long as capital is extracting part of the value they created as surplus value. (The desired distribution among different types of workers is a different matter, and I see it as irrelevant to the central premise of the LTV, which is making a much more general statement.) It would be ridiculous to posit something like corn as the source of all value when corn doesn’t even believe in value, and so has no use for its monetary form. But workers do, and it is in fact a key tenet of capitalism that workers have to believe in value, through proletarianisation (i.e., having to sell their labour-power to survive - see my fragment on freedom from a few days ago).
As a result, I don’t think it makes sense to try and dismiss the LTV on theoretical grounds. You can diminish its importance on empirical grounds, by emphasising its lack of applicability to the analysis of where value is created among different workers (and I would agree that it’s not well-suited for the task). Or you could deny its moral premises: you could view workers as NPCs who don’t deserve anything more than the bare minimum, because you don’t see them as fully human subjects who merit empathy. (I maintain that the latter view is a necessary condition for capitalism to function.)
That’s it for today. Please note that I’m nowhere near an expert on Marx or the labour theory of value - this is just my interpretation, arrived at through combining my intuitive understanding of the economy with the bits of Marx and Marxist literature that I have read. If you want to read an actual Marxist scholar’s take on the LTV, I suggest David Harvey.