Schrödinger’s Capital: FYI, Marx NEVER said labor creates value

NOTE 15: Some labor creates value

So, here is the problem with Heinrich saying we don’t need proof for Marx’s propositions: Not all labor creates a product that contains value.

Think of it this way: According to Arthur, money is simply use value with no labor value whatsoever, just like all other commodities. According to the value-form school, it is the physical material of money that gives all other commodities their value, by serving as the form of value, the value-form, the money-form. Commodities, says Arthur, are the product of concrete useful labor, not abstract labor. It is not until these commodities are exchange for the value-form, that they are reduced to values.

In the value-form argument, commodities do not have a social property of value prior to exchange; they remain simply incommensurable use values — objects that cannot be compared as values, because they are of completely different qualities. Thus, before exchange, we cannot say 10 apples equal one hoe because the usefulness of apples cannot be quantitatively compared to the usefulness of hoes. Somehow, the exchange of the objects for the value-form strips the commodities of their useful qualities and reduce them to abstract labor values. Continue reading “Schrödinger’s Capital: FYI, Marx NEVER said labor creates value”

Schrödinger’s Capital: Michael Heinrich explains why Marxists don’t have to prove anything

NOTE 14: Proof is for real sciences, not labor theory?

What sort of science is this that Marxists believe in? According to Michael Heinrich:

“Tied up with the question concerning the difference between Marx’s value theory and classical value theory is the question of whether Marx had “proven” the labor theory of value, that is, whether he had established beyond the shadow of a doubt that labor and nothing else underlies the value of a commodity. This question has been frequently discussed in the literature about Marx. But as we’re about to see, Marx was not at all interested in such a “proof [value lies behind prices].”

That statement is from Michael Heinrich’s Introduction to the three volumes of Capital, chapter 3, section 2, and it is just astonishing.

To understand the flaw in Heinrich’s reasoning, remove Marx and insert Einstein: “Einstein was not at all interested in such a proof of the existence of space-time relativity.”

Or, remove Marx and insert Darwin: “Darwin was not at all interested in such a proof of evolution.”

Would physicists or biologists accept this argument from Heinrich? Why would anyone who calls herself a Marxist? We are discussing the whole underlying structure of a modern capitalist economy, but we don’t require proof for that structure? We can just wing it until we get to extremely complex questions like the transformation problem or whether there is a law of the tendency for the rate of profit to fall, where, all of a sudden, proof value is behind prices and profits is demanded?

And Marxists wonder why no one takes them seriously.

Continue reading “Schrödinger’s Capital: Michael Heinrich explains why Marxists don’t have to prove anything”

Yes, labor hours reduction will lead to a fall in wages: But so what?

Several Marxists who oppose my argument, and even some who support it, express the concern that reducing hours of labor stock_chartwill reduce profits. While they have no objection to this in and of itself, they point out the capitalists will respond to such a fall in profits by trying to slash the wages of the working class. The reasoning behind this objection seems to be mostly political: the working class might be strong enough to impose a reduction of hours on the owners of capital, yet unable to defend its material living standards from a capitalist offensive.

Although this reasoning seems a bit far-fetched to me, we can ignore it for now because the opponents are correct even if their reasoning is not: once hours of labor fall, money wages will fall as well.

Continue reading “Yes, labor hours reduction will lead to a fall in wages: But so what?”

How superfluous labor time creates inflation

Dollarpurchasingpower
The purchasing power of one dollar, as measured in percentage of an ounce of gold. (1970-2012)

I want to turn to the question of the impact of the growing mass of superfluous labor time has on the exchange value and prices of commodities. Once i am finished, I hope you will understand why inflation is not a mystery — and, consequently, why all inflation within the mode of production can be traced to the growing mass of unproductive labor.

As I explained in the previous post, the emergence of a significant mass of superfluous labor time within the mode of production is the result of the tendency toward overproduction of commodities, of overproduction of capital in the form of commodities.

According to Marx in Volume 3 of Capital, this overproduction necessarily results in the devaluation of capital: At the point where overproduction of capital becomes a general condition of the mode of production, no increase in the mass of capital can add to the mass of profits; indeed, the possibility exists that an increase in the mass of capital actually results in a fall in the mass of profits.

Continue reading “How superfluous labor time creates inflation”

Why superfluous labor time is a really big problem for labor theory

To explain the impact a reduction of hours of labor has on the state, it is first necessary to explain three interrelated phenomena that, while not explicitly assumed by Marx in Capital Volume 3, chapter 15, nevertheless can only be explained based on that text. Taken together these three premises amount to the breakdown of production based on exchange value.

These premises are:

  1. A growing mass of superfluous labor time within the mode of production;
  2. a growing divergence between the values and prices of commodities (i.e., inflation); and
  3. a growing mass of state debt that cannot be repaid.

socially-necessary-labor-time-as-a-percentage-of-the-work-dayWith regards to point 1, we have already spoken of the empirical work of both labor theorists and bourgeois simpletons that point in the direction of a significant mass of unproductive labor time within the so-called economy. However, this observation immediately runs into a problem for labor theory: superfluous labor cannot exist on the premises Marx assumes in Capital, yet it has to be explained based on those premises.

Continue reading “Why superfluous labor time is a really big problem for labor theory”

How does superfluous labor time alter the impact of labor hours reduction on profits

In my last post I showed why I think a reduction in hours of labor would affect the “economy” the same way as a crisis brought on by the falling rate of profit does. The reduction of hours of labor has the effect of withdrawing a portion of the surplus labor time of the working class from exploitation and of reducing the time available to capitalists for production of surplus value.

However, so long as the labor time withdrawn from the capitalist does not reduce hours of labor below the duration necessary for the reproduction of the labor power of the working class, the working class should suffer no change in its material standard of living. The reduction only affects capital and has the same impact as a rise in the organic composition of capital. In this case, however, the rise in the organic composition of capital is achieved by a forcible reduction in hours of living labor imposed by the actions of the working class, rather than by an increase in the proportion of constant capital to variable capital resulting from a crisis of overproduction.

I think this is correct and would appreciate any input others might have on this question.

In my last post I deliberately left out the question of the role superfluous labor plays in this problem; however, in reality the efficiency of the employment of capital in the course of the labor day is not 100%. Some portion Photograph_of_President_Truman_with_his_some_of_his_top_advisers,_upon_his_return_to_Washington_from_the_Wake_Island..._-_NARA_-_200236of the labor day is wasted, i.e., does not produce value and, therefore, does not count as productive labor time. The portion of the labor day that might fall under this heading has been calculated by various yardsticks by both bourgeois simpletons and by labor theorists. The estimate employed by Borsch-Supan is that wasted labor time amounts to anywhere from 10% to 30% of the typical labor day. On the other hand, labor theorists, employing different measures from bourgeois economists and even among themselves arrive at between 50% and 66% of the typical working day. My own calculation, based on a comparison of currency prices to commodity money prices, finds this wasted labor time now amounts to more than 90% of the labor day.

Continue reading “How does superfluous labor time alter the impact of labor hours reduction on profits”

How do wages and prices respond to a reduction in hours of labor?

In this post I show the surprising results of the empirical literature on hours of labor reduction: Contrary to the commonsense assumption, if hours of labor are reduced, the reduction will probably have no impact on wages at all.

Borsch-Supan states there are arguments for the idea reducing hours of labor will reduce the rate of unemployment, but these arguments rest on assumptions that go against the empirical evidence (which he calls “counterfactuals”). The question he asks us to ponder is whether, based on empirical evidence, there is a case for the idea employment will increase if hours of labor are reduced.

wal-mart-relies-on-taxpayers-to-subsidize-low-wagesBy contrast, there is no basis for such an argument within labor theory, because the expansion of employment in labor theory is determined by the rate of surplus value and, all else held equal, the quantity of surplus value produced is a function of the duration of labor. If the duration of labor is reduced, the mass of surplus value will also be reduced; if the mass of surplus value is reduced, the rate of expansion of the existing capital (new employment of living labor) must also fall.

At the same time, a reduction in the mass of surplus value produced means the mass of profits have fallen, since profits are nothing more than the mass of surplus value divided by the total capital invested. Since profit is the motive of capitalist production, the capitalist will again take steps to increase profits by further reducing wages. How this is done is not important at this point, but in labor theory there is no reason to assume fewer hours of labor increases employment — just the opposite: fewer hours of labor accelerates the reduction of living labor in production.

Continue reading “How do wages and prices respond to a reduction in hours of labor?”

What Borsch-Supan overlooked in his discussion of the economic impact of reducing hours of labor

How reducing hours of labor affects the so-called economy is, according to Borsch-Supan, determined by six questions:

  1. What effect does reduction have on wages?
  2. What effect does reduction have on productivity?
  3. What effect does reduction have on expansion of constant capital?
  4. What effect does reduction have on workers’ overtime?
  5. What effect does reduction have on prices?
  6. What effect does reduction have on output?

great-depression2soup-lineIf you notice, the questions Borsch-Supan asks actually can be reduced to three:

First, his questions on productivity (1) and output (6) are simply two side of the same coin. How much of any reduction in hours of labor result in an improvement in the productivity of labor power?

Continue reading “What Borsch-Supan overlooked in his discussion of the economic impact of reducing hours of labor”

Robert Kurz, David Graeber’s “Bullshit Jobs” and the collapse of capitalism

In section 3 of the Apotheosis of Money, Robert Kurz takes on a problem that has been discussed by Marxists for almost 80 years. The discussion is important because, I believe, its conclusions will have more to say about what a post-capitalist society actually looks like than any of the issues typically raised by the Left:

“it is clear that, taken as a whole, the share of those unproductive workers (viewed from the perspective of surplus value production) who only represent social consumption, that is, “overhead costs”, is constantly increasing.”

t1larg.office.spaceAnother way to state this is that an ever increasing share of the total labor time of society is being wasted on unproductive labor —   an issue raised by David Graeber in his recent essay, On the Phenomenon of Bullshit Jobs.

Kurz’s essay is significant to me, because if, as I think, communism is free time and nothing else, society seems to be preparing for just this possibility. The collapse of capitalism will likely appear, as it did in the Soviet Union, as a crisis in the form of massive unemployment, which locks billions out of the labor market, making it possible for the social producers to eliminate most work in a single stroke. The preparation for a society founded on free, disposable time for the many, who can use this free time for self-activity in whatever way they want, may just be taking the form of an ever increasing quantity of labor time that is being unproductively expended by capitalist firms.

Continue reading “Robert Kurz, David Graeber’s “Bullshit Jobs” and the collapse of capitalism”

Platypus Question No. 4: The Great Depression, the Left and the Politics of Work

In question 4, the Platypus group asks about the historical influences that inform the politics of work:

“4. In the history of the Left, what examples do you regard as informing your attitude towards the politics of work and unemployment today, and what is relevant about these touch points?”

In think the seminal event in the formation of the Left’s attitude (not my attitude) toward the politics of work and unemployment is its inability, eight decades later, to come to grips with the Great Depression. To a large extent Marxism is precisely at the same point it was in its classical period and in some important aspects it has regressed.

Continue reading “Platypus Question No. 4: The Great Depression, the Left and the Politics of Work”