> But isn't this just because of certain conventions that have been
> instilled in the social division of labor that make one type of labor
> seem more important than another?
Hmm. Well, it seems to me that what you're proposing is basically an argument that says all market prices are just social constructions based on social conventions. There's no doubt that norms influence prices in the labor market to a significant extent, but I think even the most heterodox economists would say this always happens within the boundaries set by supply and demand. For example, the wages of medical specialists have increased a lot relative to family doctors in recent decades. This is related to the fact that medical specialty boards restrict entry to their fields by creating a limited number of med school and residency slots. But they always did that. What's changed, probably, is that norms in the high-end labor market have evolved, so that with CEOs and Wall Street assholes making such enormous sums of money it no longer seems so outrageous for an anesthesiologist to exploit his or her market power and pull down $400,000. But if somehow 10 million Americans woke up tomorrow with enough skills to be competent anesthesiologists, no one would be willing to pay that much anymore. To put it in your terms, anesthesiology would "seem less important" than it previously did - but that's because of the objective fact that it has become a more common skill (and therefore earns less money - which, in an inegalitarian society, is also used as a measure of importance). In other words, the social conventions follow the objective facts.
> As in your example, I don't have anyone
> mow my lawn, but if I did, I would be paying them at regular intervals
> as the lawn grows. I might pay my mechanic more each time I see him,
> but if I had to see him more than once or twice a year, I'd want to
> find a new mechanic. In the end, I might pay the lawn guy and the
> mechanic about the same amount over the course of the year.
I think this misses the point. "High value-added labor" means labor that commands a large amount of money *per time-unit of work*. How many times per year a particular *consumer* needs the worker's services is irrelevant. Even if you, the consumer, only saw the mechanic once or twice per year, as long as you paid him more per hour than you did the lawn-mower, the mechanic's labor would be "higher value-added." Why? Again, it's about scarcity. When prisoners trade contraband items, the price of cigarettes in terms of toilet paper will fall if you hand out 100 cartons of cigarettes, whereas the price will rise if you hand out 100 rolls of toilet paper. Likewise, if there are more people who can do a particular job, the price of their labor will fall. I remember talking to a graphic designer friend who said he didn't want to move to [city] because "there's so many graphic designers there" and he wouldn't be able to make as much money.
>> By definition, value added is (essentially) wages-plus-profits, so it
>> applies equally to labor and capital. Or, put another way, value added
>> equals the value added by labor plus the value added by capital. The
>> equivalent of "skills" for capital is (essentially) "technological rents" -
>> just as skilled workers earn more in part because their skills are scarce,
>> capital invested in activities embodying technological rents earns a higher
>> return because, by definition, "high technology" firms have less
>> competition; relatively few firms/entrepreneurs have figured out how to
>> carry out high-tech production processes.
>>
>
> But capital doesn't really add any value here; it just pays for the
> labor which has added the value and protects these advantages through
> IPR and, possibly, the equipment needed for the tech processes
> (incidentally, also produced by other laborers, etc.)--though this
> brings up the social process through which that labor is "skilled,"
> often educated in state institutions and usually taking advantage of
> previous insights of other workers. So capital doesn't really "add"
> anything, right? It just puts up some money to get other people do add
> value or by other people's added value?
>
Not entirely. There is a type of labor that can be called "entrepreneurship." It is analytically separate from the simple provision of money/capital to an enterprise. In a capitalist society, the entrepreneur usually supplies at least part of the capital, so the two functions are in practice intertwined, but conceptually they're distinct, and in fact they don't always perfectly coincide in the real world. So for example, imagine an economy where the state has a monopoly of capital, which it lends out to entrepreneurs for a fixed interest rate - say, 6%. Anybody can be an entrepreneur and borrow money from the state, use it to start and operate a business, and pocket the difference between the rate of return on the business and the interest rate owed to the state. If "A" borrows money to invest in a "commodity business" that embodies no technological rents, he might earn a return of, say, 8%, pocketing a 2% spread over the interest rate. But if "B" figures out how to build a better mousetrap that nobody else has thought of, "B" can earn, say, a 15% rate of return and pocket a 9% spread. Yes, he had to buy equipment and hire labor, but "A" could have done that too -but he just didn't know how to combine equipment, labor and a production plan in such a way as to create the better mousetrap. Neither "A" nor "B" is a "capitalist," in the sense of "rentier," since neither owned his own capital - each had to borrow the capital. But they are both capitalists in the sense of "entrepreneur," and in the end, "B" earns large "entrepreneurial rents" from the technological knowledge he holds. Eventually, though, as people figure out how to build similar or better mousetraps, "B"'s technological rents are eroded, and eventually mousetraps become a commodity business. This is the "product cycle."
> So, in general, for this to be effected, it is actually not in a
> competitive environment. To have "high value added" you have to have
> either and effective or legal monopoly on one or more of the
> components or processes.
Yes. Although, in practice, legal monopolies are usually less important than the "effective" monopolies that are inherent in figuring out how to undertake high-tech production before everybody else does. In other words, it doesn't directly correspond to the common-sense concept of an "unfair monopoly." Also, it's usually not a literal monopoly - there is usually more than one competitor in the business, just not enough to generate perfect competition.
> And the "value added" of branded goods is
> basically just the ownership of the premium consumers might pay based
> on some fetish they attach to the commodity.
>
Yes, if the brand is a pure image brand - like, presumably, Nikes. Not all brands are like that. People pay a premium for the Apple brand not only because of the marketing but also because they've come to expect, based on experience, that Apple's products work really well. It's a way of providing information about the product in advance, in a world where information is scarce and lemons are a hazard.
>
>> As for the origins of the term, the OED says "value added" was first used in
>> 1935 in connection with the development of the concept of a value-added tax:
>>
>>
>>> 1935 Social Research II. 161 We may call the value added tax a 'refined
>>> sales tax'. Ibid., A tax which chooses as its basis of assessment the sales
>>> after deduction of all expenses for raw material and for repair or
>>> replacement of equipment, that is, a tax on the 'value added by
>>> manufacture'.
>>>
>> But the concept of value added is ancient, going back at least to the 17th
>> century mercantilists, who were interested in precisely the international
>> division of labor. Here's something I wrote a few years ago. Sorry for any
>> formatting messiness:
>>
>
> really interesting stuff here. What is the citation?
>
>
It's unpublished, but I can give you a citation offlist if you need one.
Best, SA