[lbo-talk] an alternative conceptual framework.

Julio Huato juliohuato at gmail.com
Fri Jan 20 20:53:35 PST 2006


Marv,

LBO Talk is a bit too fast for me. I can't keep up with all the postings on this and related threads. So I'll just keep it narrow.


> I don't know how to reconcile your statement that
> "in any society, regardless of its specific mode of
> production, labour is productive if it results in a
> use value" with "in a capitalist society, labor is
> productive if...it is also productive of surplus value."

Ultimately, they cannot be reconciled. You either produce to meet human needs as an end in itself or produce for profit. If you produce for profit, producing use values is like a necessary evil. Necessary and evil. Capitalists would rather have it optional and good -- for them.

Their heart is not in use-value production and competition makes it hard for individual capitalists to swim upstream. That's the living contradiction at the core of life under capitalism. It is a contradiction that can be reconciled only temporarily, but that ultimately has to be resolved. Forgive my rhetorical excess, but it will be resolved by either capitalism degrading our humanity beyond repair or by the best of our humanity prevailing and tossing capitalism in the dustbin of history.

It's a mixed bag, but overall the evidence is that it's in the nature of human beings to not passively adapt to their environment (including the social environments we create), but to actively transform it and conform it to our aims. As an analogy, think of the conflict between being a human being and being a slave: How can that ever be completely reconciled?


> The discussion was sparked by Yoshie's
> characterization of government workers as
> "unproductive" and your two statements,
> unless I missed something, could, it seems
> to me, be used to either support or refute
> her position. Things are best understood in
> relation to each other, so can I ask you where
> do you stand in relation to her position?

It depends on the sense in which Yoshie uses the term. I haven't read all she's written on this topic, but I'd think she is saying that government workers are unproductive of surplus value. If so, then I agree with her. That doesn't demean those workers. As to the concern that in a particular context the term may sound derogatory to unaware ears, I guess there's a point to that. But on LBO Talk, I'd expect people to make an effort to understand what Yoshie really means, as opposed to presume she means to denigrate government workers.


> And to Jim Devine's notion of "indirectly" versus
>"directly" productive labour as an extension or
> modification of the LTOV, which I find persuasive?

To be honest, I'm not sure I understand Jim's point.


> And perhaps also to the critiques of the "use value" of the theory
> itself, expressed strongly by Woj and, I think, to a milder degree
> by Doug and others.

The labor theory of value is a very abstract one. The "predictions" (implications) that flow from very abstract theories may not be easy to test empirically, but that doesn't make these theories less useful.

The problem may be that the empirical measures required to test their "predictions" are too costly at the moment compared to the expected gain in knowledge. So why bother for now? But should we abandon them altogether? What if, for example, just around the corner there's a shift in the technology of empirical work that lowers that cost?

In the way a modern economist would frame it and being rather rough in our interpretation of Marx's concepts, the labor theory of value simply says that, *given the needs of people*, changes in market prices ultimately respond to changes in the social labor time required to produce them. One of the things that makes this theory very abstract is that it assumes that needs are given. In today's vernacular, this means that the demand for a commodity is infinitely inelastic -- or exogenous. In Econ 101 terms, that's a vertical demand curve.

In a more realistic setting, other things equal, the quantity demanded adjusts to changes in prices. So the demand curve tends to be downward sloping. But as simple as this now seems, this analytical apparatus was developed in the late 19th century and, more precisely, early in the 20th century. Marx just wasn't equipped to deal with endogenous demand. So he abstracted from the problem. Who can blame him for that? His is not a bad approximation for commodities that are not highly price-elastic (e.g., energy, foodstuffs and other necessities).

With an infinitely inelastic demand, it is a truism that the market price is determined solely by supply conditions, i.e., by the (marginal) cost of producing the commodity (assuming the capitalists, as a rule, seek to maximize their profits). The cost of producing the commodity is the (opportunity) cost of the resources utilized. Most standard economists are not particularly interested in this question, but what is the *ultimate* resource that constrains the economic choices made by a human society? "Human active time" (human conscious life) was Marx's response. And, come to think of it, it's a rather obvious answer for a humanist. I mean, if we traded with Martians, then we could think in terms of an opportunity cost in terms of Martian goods, but since our ultimate "trade" is with the rest of nature, then the opportunity cost is in *our* own "active time."

But, to be fair, Marx wasn't completely unaware that price-elastic needs would influence the value of commodities. I could find the exact citations and all, but take my word for it: that awareness is implicit in the formulation "socially *necessary*," meaning that if needs shrink (for whatever reasons, endogenous or exogenous), what used to be value becomes wasted social labor, and if needs expand, what used to be wasted social labor becomes value. So, all things considered, I still don't know what's wrong with the labor theory of value. Its having been formulated 150 years ago and the collapse of the Soviet Union don't make it wrong.

I'll have to postpone the note on the sociological categories.

Best,

Julio



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