Donald Booker: “What is the value of a worker’s labor power, today? Zero is clearly a bullshit answer…”

by Jehu

Donald Booker takes exception with the argument I made in my previous post. I will try to paraphrase his most important objections as best I understand them:

According to Donald, it is wrong to say workers get paid in a currency that lacks exchangeability. Workers can buy food and other goods with their wages, just as they would do with a commodity based currency. The prices of commodities may increase, but it is not as if the rate of inflation is intolerable. In the short term, the debased fiat dollars work for them to buy things with reasonable predictability. Workers with higher income even have savings and retirement options. Not many workers would want to be paid in alternative monies like bitcoins or in the currencies of many other countries.

So, Donald asks, what is the value of a worker’s labor power, today? To say the value of labor power is zero “is clearly a bullshit answer”. But he concedes the value of labor power “is murky in the end.” While we can no longer tell what labor is necessary and what labor is superfluous, we can see empirically that labor remains generally necessary.

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I need to be clear here that I do not deny that the currency in which we are paid has exchangeability — indeed it is almost universally exchangeable within the world market. It is just that I do not know what relevance that has for this discussion.

One dictionary defines exchangeability as the quality of being capable of exchange.” Chris Arthur, in a 2003 paper, defines value as a power of exchangeability and says the post-1971 debased state-issued fiat dollar is money and “has immediate exchangeability as much as any commodity money.” (Although he doesn’t seem to be able to explain why the dollar and gold continue to offer two separate and increasingly divergent prices for the same commodities since 1929. It is almost as though he hasn’t even noticed this is happening, while he is busily “rewriting” Marx’s Capital.)

Arthur then goes on to say:

“… money is the only measure of value because it has immediate exchangeability and is therefore the essential referent for measuring any putative value intrinsic to commodities. Moreover money is the condition of such a value to obtain, insofar as its sets up the form of universal equivalent and therewith provides a framework wherein commodities may be commensurate.”

It is a fascinating, if wildly hilarious, theory, but, as Arthur himself will admit, it is not Marx’s theory. I am discussing Marx’s theory; and, in Marx theory, the post-1971 dollar is no more money than a company scrip is money.

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It is precisely in order to avoid making fools of ourselves like Mr. Arthur, who, in the face of overwhelming evidence contrary to his argument, continues to insist that debased dollars behave like gold, that we must insist on strictly observing the first axiom of the labor theory of value: namely, that the value of a commodity can only be manifested as its exchange value.

And why is this? Is it because we are Marx’s apostles? His church? His priesthood? Hardly.

If I understand Capital, Marx is setting out to prove his thesis in the Grundrisse that the development of the forces of social production bound up with capitalism must lead to the collapse of production based on exchange value; that they will, as he claimed, blow it sky high. To do this he has to show there is a link between the labor expended on the production of commodities (which declines as the productivity of social labor increases) and their exchange values.

This is the first critical point of his argument; the point most Marxists today, following Arthur, want to set aside.

Today, we are at the other end of that process. This is the reason why I insist that the value of labor power today is zero. The dollar may have what Arthur refers to as exchangeability, but even he will admit — has admitted in print — it has no value. If the dollar has no value and is no longer linked to a commodity that has value, it cannot express the value of the commodities for which it is exchanged in transactions. Every exchange of a commodity for dollars expresses the value embodied in the commodity as zero.

There are, in truth, a number of possible explanations for this phenomenon, but it cannot be ignored or glossed over as having no significance. Of late, I have offered the explanation that commodities like labor power have no exchange value because they have no value. Value is not a natural quality of products of human labor, but a purely social relation. But it is also possible that the value of labor power is just being suppressed, as Grossman suggested would have to be done. There is also the idea, offered by Fred Moseley, that debased currency can express the value of commodities. However, his argument for this is rather unsatisfactory, in my opinion.

Further, it  is not just that dollars have no value and thus cannot express the value of commodities, every indication is that if dollars did have value or were linked to a commodity that had value they could not serve as a medium for the circulation of commodities within the world market today. No one would part with them for that purpose, just as no one parts with gold to buy groceries. If dollars had value, they would quickly disappear into hoards somewhere or dangle from someone’s neck as bling. Historical evidence demonstrates conclusively that dollars lack value not as a consequence of state policy but because the mode of production no longer tolerates exchange value and production carried on independently and for the account of private individuals.

Since the Great Depression, no commodity money has been able to serve as medium for circulation of commodities; this constitutes a world history. In any case, we know the exchange value of labor power is zero. This is significant and its cause must be explained. Marxist scholars cannot just continue to ignore a phenomenon with so many implications for the capitalist mode of production and for communism.