Capitalism, Marxism and Related Matters

vimothy said:

And prices equal... infomation.

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Yes, that's another dimension that missed by the LTV. Interestingly, prices themselves are a form of communication: prices aggregate other market participants purchasing behaviour.

"But there's an exchange rate between fish and gold coins where it is no longer viable for the fisherman to sell fish (e.g. when the grain he can buy with the money from fishing is so little that he's better of farming himself, or eating all his fish), then he will stop selling and do something else. Alternatively, he will have to be forced to hand over fish for a given exchange rate. In both cases, the market ceases to exist. Hence the fisherman's labour time comes in as a constraint on possible exchange rates."

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Is that really the market ceasing to exist? Isn't it better to say that the market still exists and but fish aren't available at all - so their price will rise and someone else will go and pull them out of the sea?

IdleRich said:

I don't think that decided is the right term here is it?

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That's true. I was having a date with P. Licence!

3 Body No Problem said:

But there's an exchange rate between fish and gold coins where it is no longer viable for the fisherman to sell fish (e.g. when the grain he can buy with the money from fishing is so little that he's better of farming himself, or eating all his fish), then he will stop selling and do something else. Alternatively, he will have to be forced to hand over fish for a given exchange rate. In both cases, the market ceases to exist. Hence the fisherman's labour time comes in as a constraint on possible exchange rates.

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Ah, I getcha - so really what you meant was "The fisherman decided his labour is worth one gold coin per six hours". I don't mean to imply you phrased it badly, I just meant I interpreted 'humans' as 'people looking to buy fish', i.e. from the demand side, rather than the supply side.

So yeah, the value of the fisherman's time is determined by how hard it is to catch fish, and how badly people want to eat (his) fish - the latter of course being modulated by how many other fishermen there are in the area. So we've got a very simple model of supply-and-demand market forces at work. But the LTV says a given amount of fish has an intrinsic (or semi-intrinsic) value based only on the fisherman's labour and *not* on how badly people want to eat fish, is that right?

Christ, I haven't had any lunch and this talk of fish is driving me mad. I'm going to get some sushi, back in a bit...

vimothy said:

I think that 3 body no problem and josef k clearly know a lot more about Marxism than me so I'll defer to their judgement, but as far as I know, for Marx 'value' is inherent in a commodity (commodities 'embody' labour value) and its relation to actual 'market value' (i.e. price) is there somewhere, but Marx isn't sure where exactly.

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That's mostly right, except that for Marx "[t]he labor value of a commodity is amount of socially-necessary abstract labor time embodied in that commodity. " From here. Hence labour value is something like average time it takes to produce a product. Marx introduces other forms of value (exchange value, use value ...) but it doesn't really work fully.

Mr. Tea said:

Ah, I getcha - so really what you meant was "The fisherman decided his labour is worth one gold coin per six hours". I don't mean to imply you phrased it badly, I just meant I interpreted 'humans' as 'people looking to buy fish', i.e. from the demand side, rather than the supply side.

So yeah, the value of the fisherman's time is determined by how hard it is to catch fish, and how badly people want to eat (his) fish - the latter of course being modulated by how many other fishermen there are in the area. So we've got a very simple model of supply-and-demand market forces at work. But the LTV says a given amount of fish has an intrinsic (or semi-intrinsic) value based only on the fisherman's labour and *not* on how badly people want to eat fish, is that right?

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Yes and no. The LTV never speaks of "intrinsic" labour value because that depends on the available technology.

Also the labour value is different from the exchange value (market price).

Also the labour value does <i>not</i> depend on "how badly people want to eat (his) fish", that's relevant for the exchange value.

vimothy said:

Doesn't that depend on the price of labour relative to the other factors of production (i.e. capital)?

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Totally.

I suppose my point really is that labour is only a constraint on production rather than a source of 'value'. Obviously, if the same thing is made by both robots and humans, the value of the good is not different in those two cases simply because the later takes more man hours. In fact, it seems to me to be the case that amount of labour required to produce any given good has little impact on the value (though obviously some impact on the price), in that it's irrelevant to me what ratio of labour to capital was used making my ball point pen, only that it works and that I need one (or two or three, but not thousands).

EDIT: Also, note that if labour really does determine value (to any extent), as industries -- and societies -- increase capital usage and therefore productivity, total value decreases!

3 Body No Problem said:

But at Gates' level, Microsoft shares are not liquid. If he sold all his shares in one go, the share price would collapse.

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Interesting Krugman column the other day:

3 Body No Problem said:

Yes and no. The LTV never speaks of "intrinsic" labour value because that depends on the available technology.

Also the labour value is different from the exchange value (market price).

Also the labour value does <i>not</i> depend on "how badly people want to eat (his) fish", that's relevant for the exchange value.

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Of course, these were all points I was making - I suppose the technology available is one of the 'environmental' factors affecting how hard or easy it is to produce a certain good, in the wider sense of the word 'environment'. And the difference between labour value and market or exchange value is what I was getting at, too.

josef k. said:

There is a possible Marxist response to this argument, which runs as follows: machines, technologies, capital etc, are in themselves the sedimentation of labour; thus, considered over the long term, the labour cost of the pen will in fact be the same in both cases... Any takers?

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This is a reasonable answer, but there is an equivocation in the use of value here that's confusing. In discussing Marx LTV one needs to distinguish

• Labour Value, which is defined as the average (relative to a given level of technological
  development) time needed to produce something.
  
• Exchange Value, aka price.

What's important is that the exchange value is observable, while the labour value is not directly observable. Marx use of the LTV has two functions.

• To give a scientific foundation to the concept of exploitation. Marx though, correctly, that some people are not getting as much out of their labour input as others, and that that's something that ought to be rectified.
• To explain the prices (exchange value) of goods under equilibrium capitalism (NB Marx did not believe that the capitalism he was familiar with was under equilibrium, it was more a theoretical challenge he was trying to meet). Marx though that exchange value would converge towards labour value under equilibrium conditions.

I do have a test today. that wasn't bullshit. It's on European socialism. I mean, really, what's the point? I'm not European. I don't plan on being European. So who cares if they're socialists? They could be fascist anarchists. It still doesn't change the fact that I don't own a car.

It seems that we're back onto this argument/discussion about the Labour Theory of Value, which I have to admit mystifies and bores me: how does this relate to the Class System or Imperialism or the industrial meat-grinder we still call War. Aren't these infinitely more interesting topics?

What do people in sweatshops or call centres think about exploitation and the Labour Theory of Value?

Isn't the point of sharing capital (ie. the machines that make things so you don't have to) all about working less not more? I want to live in Iain M Banks' SF Utopia!

What's wrong with politics being "utopian" anyway? If I plan to throw a party I usually have "utopian" ideals about how it'll turn out: and when it's only half as good as my dreams, well that's still pretty good...


josef k

There is a possible Marxist response to this argument, which runs as follows: machines, technologies, capital etc, are in themselves the sedimentation of labour; thus, considered over the long term, the labour cost of the pen will in fact be the same in both cases... Any takers?

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No because the people who worked to make them etc are dead and cannot enjoy any of the "value".

Maybe this is why copyrights use to expire only a couple of decades after the creators died. Now they expire 75 years later so Disney Corp. can keep milking Mickey Mouse.

To be more specific - for Marxists, the problem with capitalism is not simply that it is a flawed system (arch-conservative non-Marxists, such as Winston Churchill, are fully capable of admitting this too) but that it is itself, in some sense, the source of all of the flaws that exist in society.

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Surely nobody said it was the source of all the flaws just many of the big ones

Anyway, we don't live in a purely "capitalist" society - it's a bit of a mish mash of systems. I note that England, for example, along with many other "capitalist" European countries still has a monarch as the head of state. I think the Americans are trying for something similar..

swears said:

I do have a test today. that wasn't bullshit. It's on European socialism. I mean, really, what's the point? I'm not European. I don't plan on being European. So who cares if they're socialists? They could be fascist anarchists. It still doesn't change the fact that I don't own a car.

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Then stop posting and go take your friend's dad's car out for a spin.

TWIST AND SHOOOOUUUUT!!!

D84 said:

It seems that we're back onto this argument/discussion about the Labour Theory of Value, which I have to admit mystifies and bores me: how does this relate to the Class System or Imperialism or the industrial meat-grinder we still call War. Aren't these infinitely more interesting topics?

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Perhaps. I agree that we have reached something of an impasse, but I am still interested in the LTV, whether or not it can be set aside, and what remains of Marxism if it is.

Isn't the point of sharing capital (ie. the machines that make things so you don't have to) all about working less not more? I want to live in Iain M Banks' SF Utopia!

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Yes, but the contemporary problem seems to be that the rewards go to capital, not to labour. Consequently, the less skilled do indeed work less or just for less money. I wouldn't describe it as "utopia", though.

There is a possible Marxist response to this argument, which runs as follows: machines, technologies, capital etc, are in themselves the sedimentation of labour; thus, considered over the long term, the labour cost of the pen will in fact be the same in both cases... Any takers?

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Is there any evidence of this actually happening?

vimothy said:

Yes, but the contemporary problem seems to be that the rewards go to capital, not to labour. Consequently, the less skilled do indeed work less or just for less money. I wouldn't describe it as "utopia", though?

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But do the less skilled actually work less? Have you worked in a factory? Or a shop or a bar? Do you think your butcher would agree with your statement? How about his or her employees?

How about temps, who get paid a tiny bit more but can't pay their bills if they want to take a break or get sick - are they just having a lark?

D84 said:

But do the less skilled actually work less? Have you worked in a factory? Or a shop or a bar? Do you think your butcher would agree with your statement? How about his or her employees?

How about temps, who get paid a tiny bit more but can't pay their bills if they want to take a break or get sick - are they just having a lark?

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To take those questions one at a time: yes, yes, yes, no idea, no idea, and I don't know what you mean.

The point I was making is that as economies move up the value-chain, capital replaces labour, creating downward pressure on wages for the less skilled and upward pressure on wages for the more skilled, leading to the popular contemporary issue of increasing inequality. If, as a factory owner (say), you can replace workers with more reliable machines... well, where do you think all the cobblers and tailors have gone?

So, everyone works less in two senses:

• There are less jobs, because there is more and better capital
• There is less 'work' within jobs because there is more and better capital

Not to mention the fact that you're presumably more likely to be unemployed altogether if you have little in the way of skills and qualifications.

Also, if capital makes doing a certain job easier, then you are probably expected to do more of that job. Sort of like how the vacuum cleaner, washing machine etc saves us time in doing certain jobs but at the same time the general expectations of cleanliness have increased.