The working class hasn’t been paid wages since April 5, 1933, Adam

by Jehu

I received this extensive reply from Adam in a comment on my previous post. I feel it is important enough to post it here in its entirety with my response:

“OK then, enlighten me (but not by gas, please), what is the actual value of labour power today? Since you maintain that workers are currently and have been for decades paid less than the value of their labour power, you must have some view as to what its value is.

And which part of Marx’s theory of labour power set out in chapter 6 of Volume 1 of “Capital” does Grossman dismiss?

What follows then is an extensive, and likely familiar, quote from Capital, chapter six, on the subject of the components of labor power:

“By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description.”

“The value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labour of society incorporated in it. Labour-power exists only as a capacity, or power of the living individual. Its production consequently pre-supposes his existence. Given the individual, the production of labour-power consists in his reproduction of himself or his maintenance. For his maintenance he requires a given quantity of the means of subsistence. Therefore the labour-time requisite for the production of labour-power reduces itself to that necessary for the production of those means of subsistence; in other words, the value of labour-power is the value of the means of subsistence necessary for the maintenance of the labourer. Labour-power, however, becomes a reality only by its exercise; it sets itself in action only by working. But thereby a definite quantity of human muscle, nerve, brain, &c., is wasted, and these require to be restored. This increased expenditure demands a larger income. If the owner of labour-power works to-day, to-morrow he must again be able to repeat the same process in the same conditions as regards health and strength. His means of subsistence must therefore be sufficient to maintain him in his normal state as a labouring individual. His natural wants, such as food, clothing, fuel, and housing, vary according to the climatic and other physical conditions of his country. On the other hand, the number and extent of his so-called necessary wants, as also the modes of satisfying them, are themselves the product of historical development, and depend therefore to a great extent on the degree of civilisation of a country, more particularly on the conditions under which, and consequently on the habits and degree of comfort in which, the class of free labourers has been formed. In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known.”

Having made his point that the components of labor power are all of a class that would be difficult, if not impossible, to sacrifice in part or whole to the needs of capital’s profits, Adam admits there still remains some marginal variability in this definition:

This last point about “a historical and moral element” is important since, though it is fixed at any one time, over a longer period of time it can vary. This would be an explanation of the phenomenon observed over the past fifty years which you analyse as workers being paid less than the value of their labour power. Rather than this it would be a reduction in its value through a reduction in its historical and moral element.

Yet, even this variability must have some definite limits:

Marx goes on to be pretty explicit as to what workers getting paid less than the value of their labour power would mean:

“The minimum limit of the value of labour-power is determined by the value of the commodities, without the daily supply of which the labourer cannot renew his vital energy, consequently by the value of those means of subsistence that are physically indispensable. If the price of labour-power fall to this minimum, it falls below its value, since under such circumstances it can be maintained and developed only in a crippled state. But the value of every commodity is determined by the labour-time requisite to turn it out so as to be of normal quality.”

Adam thus concludes that Grossman’s view that, at a certain point in its development, capital inevitably must violate its own premises and drive wages below the value of labor power, while mathematically demonstrable, must be impossible practically:

So, whatever Grossman may deduce from the mathematics of his monumental thought experiment, workers being paid for decades below the value of their labour power is not a practical possibility. In the long run this would lead to lower profits as the sub-normal quality of labour power would not be able to produce so much surplus value as labour power of normal quality. It could only happen temporarily in the slump phase of the business cycle as one of the factors working towards the restoration of the rate of profit needed to move on to the next, recovery phase of the cycle during which wages would rise again to the value of labour power.”

In my opinion, this is a convincing argument. However, I have two problems with it: first, Adam is surreptitiously invoking undefined forces that, he alleges, act to maintain the wages of the working class to equal the value of their labor power. In my opinion, this is not a big problem. It can be fixed.

The second problem, however, may not be fixable: Adam’s argument that if the working class was paid less than the value of its labor power it would produce less surplus value, although convincing, seems a little backward in the case Grossman is discussing. Grossman is discussing what happens after the rate of profit has already fallen to zero and there is a severe shortage of surplus value. Production has ground to a halt and the national economy is awash with a mass of excess capital and a massive population of superfluous workers.

Adam seems to be taking cause for effect: he wants to explain the amount of surplus value produced by the quality of the labor power producing it, when the quality of the labor power is being explained by the amount (i.e., the shortage) of surplus value produced.

*****

In any case, my original challenge to Adam was pretty simple and straightforward:

“Stop gaslighting us, Adam. You have no idea what the actual value of labor power is, nor whether any worker actually receives this in return for their labor power. Like most people who dismiss Marx’s theory, you just make your argument up as you go along. You have no data to support this argument and you know it.”

Rather than directly addressing my question by telling us the actual value of labor power and/or whether any worker actually receives this in return for their labor power today, Adam chose to present me with a laundry list of use-values, the labor values of which Marx argued enter into the determination of the value of labor power along with a certain historical and moral element.

The problem is that neither Adam nor, to my knowledge, any other living Marxist has any idea what the value of labor power is today and hence could not tell us whether any worker actually receives this value in the form of wages.

Just to be clear on this point, I count myself among those Marxists who could not provide any estimate of the value of labor power today.

The reason my above statement has to be true is determined by a fundamental axiom of Marx’s labor theory of value:

“The progress of our investigation will show that exchange value is the only form in which the value of commodities can manifest itself or be expressed.”

The only way to express the value of labor power, says Marx, is in so many units of another commodity that serves as its equivalent. This requires a commodity money of one material or another. Since wages are no longer denominated in any commodity money nor in any currency fixed to a commodity money, to estimate the value of labor power today, we would have to first convert our fiat currency wages into definite weights of gold, silver or both.

But that’s just a mathematical calculation; it’s not the real problem here.

*****

The real problem is that even if, in theory, we could mathematically estimate the value of labor power in terms of a commodity money, as a practical matter this notional estimate still has no relation to the wages (i.e., the exchange value) actually paid to any worker today and hasn’t had any relation to the wages paid to workers since perhaps April 5, 1933, because, on that day, the production of profit based on exchange value collapsed and the Federal government in Washington was forced to step in and replace gold (commodity money) with its debased fiat currency.

Washington was forced to this measure because, over the previous four years, gold was rapidly withdrawn into hoards by its owners throughout the world market. Gold, and any currency or credit money linked to gold, would no longer circulate within the world market as money, would no longer serve as means for the circulation of commodities, would no longer function as means of exchange to buy labor power for purpose of producing surplus value.

By April 5, 1933, the only “money” that could serve as means of exchange in the United States (or anywhere else in the world market) was a debased state-issued token, incapable of manifesting the values of commodities as exchange value. This fiction expressed the value of every commodity, including labor power, as zero.

My question to Adam was simple, but, from the standpoint of labor theory, the answer is even simpler:

Q: What is the value of a worker’s labor power, today?
A: Zero

The truth is that, in labor theory, our only evidence that a product of human labor has value is its exchange value. If an object like labor power has had no exchange value for almost 90 years, we can pretty much assume it has no value as well. This might seem to be an extreme conclusion to many, but it is actually a better fit for Marx’s argument in the Grundrisse than Adam’s entirely unsubstantiated claim that “most workers have been and still are paid more or less the value of the working skills they sell to an employer.”

*****

Let me give you my thinking on this — and let me say at the outset, I am not sure about any of this:

The really big conceptual difficulty in accepting my claim that labor power has no value today is accepting the conclusion that products of human labor generally can be produced that have no value. But we already know this objection is actually no objection at all: for most of human history, most products of human labor were produced as non-commodities. Having value is not an inherent (natural) quality of products of human labor like having mass or being composed of atoms.

Although we might have great difficulty accepting this proposition, products of human labor are not generically values; rather, value is a historically specific social attribute of these products. In the Grundrisse, Marx predicted the eventual collapse of exchange value as the measure of use-value owing to the progressive reduction of human labor in production. As I have argued, this event likely occurred in the 1930s.

The collapse of production based on exchange value created a real analytical problem for labor theory, however, because, once breakdown occurred, we no longer know the labor values of any commodity, including labor power. Price no longer expressed this historically specific social attribute. And if we don’t know the values of commodities, we have no way of knowing how much of the labor we do today is actually socially necessary and how much of it is entirely superfluous.

This is the problem Postone raised.