I don’t think you fully understand the nuances of LTV. Saying “all value is created by labor” is like saying all linguistics is caused by “inhaling and exhaling” … yes, it guess that is true at some level but so what? LTV is a dead end and the everyday reality of LTV is its use as a platform for rhetoric as opposed to mathematical progress.
Is Karl Marx the only economic analysis tool you have? Most of your responses seem to be a virtual cut & paste of his thoughts. To paraphrase Good Will Hunting, “do you have any original thoughts of your own on this matter?”
You have also not addressed economic analysis focused on PREFERENCES. Why do you reject this? Game Theory and PREFERENCES may not be the holy grail (probably isn’t to be sure) but it is light years beyond LTV.
In order for preferences to be met, there have to be products. In order for products to exist in the first place, ___________________________________________ (fill in the blank).
And just to complicate things, I’ll add to your well-stated point above by throwing out 2 more concepts. Since they relate to the OP.
Individuals have preference profiles and not one, single preference. They will make changes on the margin depending on how variables change. For example, an individual may have a choice between two jobs:
One that is next door, requires him to work from 9 to 5, and pays $30,000 per year.
One that requires extensive travel, requires much greater hours and stress, and pays $200,000 per year.
He may choose one over the other given the variables described above. But as the variables change (distance traveled shrinks or grows, hours shrink or grow, $$ earned shrinks or grows) he may make a different choice once certain thresholds are crossed.
Each individual has a different preference profile. Therefore, there is no one single set of products, or ‘provision of needs’, that satisfies everyone’s preference profile.
Those concepts may be helpful later on. That is, if this discussion continues that long.
Exactly. Now, given msmith’s assertion that the free market doesn’t guarantee the satisfaction of everyone’s preference profile, how should we go about actually guaranteeing that, if not by the working class taking real power in society and building a system with precisely that aim?
The free market guarantees the maximization of surplus for each consumer. It doesn’t guarantee that everyone’s preference profile is satisfied exactly.
I prefer to have a luxurious private jet, that runs on air, and that transports me to Tahiti every morning for the price of $1. I can’t have it. So I need to make choices that maximize my surplus (or utility) accordingly with the resources at my disposal.
And for the rest of your post…Good God. The language reminds me of the coffeehouse scene in Dr Zhivago before Lara goes off to the front.
I think we can all agree that slavery is wrong, but we are not talking about slavery. If I start a business and hire others to create stuff, I am not appropriating their labor. I am buying it from them. The workers have no inherent right to the capital.
I think this is the argument. According to Marxism the labourer SHOULD own the fruits of his labour. The problem is that this creates an endless loop. Another labourer invented the product that is made. Another labourer created the factory in wich that product is made. They should all get the fruits of their labour.
You incorrectly assume that labor has to be expended and is applicable in all situations.
Not all “products” have to be manifested as particular arrangements of atomic particles… therefore, it is not a prerequisite that there needs to be effort (“labor”) to rearrange those atomic particles in the first place.
“Labor Theory of Value” is dogma and religion that tries to pass itself off as true intellectual analysis.
Bosses do two basic things: hunt up more ways to sell the goods or services their companies provide in order to turn greater profit, and administrate (supply orders, maintenance, scheduling work shifts, and the like). In socialism, which intends to do away with the profit motive, the first category of duties become irrelevant; the second category aren’t anything the workers themselves can’t do. Thus the role of the capitalist becomes obsolete.
The labor isn’t being paid for by an amount equal to the value she produces. A quick and dirty example: minimum wage jobs, such as a line cook at McDonald’s. Currently, the federal minimum hourly wage is $6.55 - so if a line cook works one hour, she makes enough to buy one of the meal combos. But she doesn’t produce the equivalent of just one meal combo in one hour. A single burger grill has a capacity for 12 small patties, meaning she can crank out 12 burgers - or 6 Big Macs - in the space of under two minutes. So over the course of that same hour she produces 360 times the value of her hourly pay. The value comes from her labor; the profit comes from the undervaluation of that labor by her employers.
The specific numbers are certainly different the further one goes up the job ladder but the principle remains the same. Take that squirrelly little rat bastard Pete Campbell from Mad Men (great show, by the way). At one point he discusses his salary - $3500 a year - obviously a princely sum in 1960. But it’s clearly a fraction of the value brought in by even just one of the accounts he lands as part of his job. So while climbing up the job ladder from grill cook to ad account executive has some immediate individual benefits, it doesn’t eliminate the fact that unless you own the company you’re not getting paid for the full amount of your work.
I should, at this point, clarify something. What a worker sells is not the product of labor but the ability to labor. If the aforementioned line cook did in fact own the burgers she grilled, she should be able to negotiate the price of the burgers before she turns them over to the supervisor. (I’m willing to bet that everyone reading this right now is calculating how long she’d last there if she actually tried to.) Instead, she’s selling her ability to cook burgers - as well as her ability to cook fries, nuggets, fish sandwiches, stock the counter, sweep, mop, clean the grills and the fry vats and the dishes, cashier at the counter or drive-thru, and whatever else management needs her to do. That’s negotiated once a year or so if she’s lucky, or backed up by law if she’s not so lucky. Or completely arbitrary if she’s undocumented.
Use value is just that: the usefulness of a product. Bread, for example, is useful in that it can be eaten and it provides nourishment. Exchange value, on the other hand, is the price of a product - how much a loaf of bread can be sold for. The first is an inherent characteristic of the product; the second is an invented social characteristic. You can’t take away a loaf of bread’s consumability and nutritive value but you can take away its price (otherwise the word ‘free’ would have one less meaning). Game theory and arguments about preferences talk only about how exchange value is set. While they may acknowledge the existence of use value as a factor, they say nothing about the ultimate source of either.
Ruminator - OK, give me an example of a preference being satisfied without labor being expended.
The marxist religion like all other religions often have some kernels of truth.
Jesus said be nice to eachother, wich is probably good advice even for atheists.
Like all religions marxism also have the total converts that believe all the words in the book to be great thruths.
People who when told that labourers cannot walk on water react by quoting holy scripture without understanding what they are saying.
They also come up with things like new products. If an employee can do that, he, she or it may do well to patent it or start its own business.
How exactly do you do away with the profit motive? I can see how you can get a small group of like minded individuals to act in a purely altruistic way, but it is not something you can enforce without turning really ugly.
The role of the capitalist is to provide capital. The workers won’t get far without a factory.
Good point. Since she didn’t own the meat and the bread or the grill, etc. she doesn’t own the hamburger. But the value of her labor comes from how easy it is to do. Granted it is a shitty job (I used to do it), but it doesn’t take any real skill. There are tons of people who can and will do it which drives down its price. Also, just because the worker can make 360 hamburgers an hour, doesn’t mean McD’s can sell that many. They are taking risk in owning a restaurant and that has to be worth something or it wouldn’t get done.
That is what I meant by intrinsic value. Bread or goats or gold or dollars have no inherent value. I know people for whom bread would be lethal. It has no “use” value for them. The bread only has value if I want to eat it or I can trade it for something I do want. Similarly, labor has no inherent value. You, after all, are willing to make hamburgers for nothing.
BTW, the wages paid to illegal workers are not arbitrary. Nobody standing outside of Home Depot will work for five cents a day (although at the end of the day, you could refuse to pay and there is not much they could do about it, so in this sense, I guess it is arbitrary.)
They do all get the fruits of their labor in the form of money.
Here is how it works in the real business world where adults work. Your line cook produces 360x the value of her hourly pay, correct? Well, if she was just standing on a streetcorner with a barbeque grill, she could collect the entire proceeds of that labor (less the cost of the grill and supplies). Well, she isn’t doing that because chances are she would not be able to sell as many burgers on her own. Even if she could, I’m not so sure her personal profit would be that much higher once you subtract her costs.
Each burger the cook produces not only has to contribute to her salary, but it also has to contribute to the supplies, the salary of the register girl and the manager as well as the rent for the building. There is a whole supply chain of people that need to get paid so that one burger can reach your mouth.
Because all the prices for these dozens of components are not fixed and are set by the market, you are able to eat your burger at a reasonable price and everyone gets paid what their labor is actually worth. At OlentzeroBurger, the burgers would be so expensive, no one would be able to afford them.
Really the whole problem with socialism is that people think their contribution to society is a lot greater than it really is so they want to take out more than they put in.
But only part of the value that their labour has created according to marxist theory. The rest goes to the evil capitalist.
Anyway, I always thought that marxism is showing its age.
Its the child of a feudal mindset that should just be left to die.
Talking about labourers and use values in a society where the majority of value and where most people work is in the service sector doesnt make sense to me.
Again, socialism isn’t based on “do a good job because a good job is its own reward” altruism. It’s based on increasing productivity so that it takes less time and less effort to add to the general supply of products to be used, thus increasing the amount of goods an individual worker gets in return for his work.
Using Ruminator’s idea of a preference profile in the abstract, meaning “the sum total of goods and services required to satisfy an individual’s needs as expressed via his preferences”, let’s start with the unprofitable (for the capitalist) assumption that the number of hours needed to satisfy an individual’s preference profile is 40 - a whole work week. So, an employee works 40 hours and gets 40 hours’ worth of product in return.
Say, then, that improvements in technology and organizing production occur in a deus ex machina maneuver and the amount of time now needed to satisfy the preference profile is 15. Under capitalism that wouldn’t mean a reduction in the work week whatsoever; the boss now gets 25 hours worth of labor that doesn’t go to the worker but remains in the boss’ hands to sell.
Under socialism, on the other hand, it would mean a reduction in the work week - certainly not to 15 hours, as the point would be still to generate a surplus, but a reduction nonetheless, so that the worker now has more time to himself to relax, pursue other interests, and such like. That surplus, instead of going to profit individual capitalists, now becomes part of the general supply of goods from which all workers may draw in return for the work they themselves have performed. Ultimately, the point is to improve productive technology and increase the general surplus to the level where the work week is laughably small and the amount drawn in return becomes almost too much for an individual worker to possibly use. The surplus becomes permanent.
‘Capital’ is a social relation. Means of production like a factory are capital only if they are held in private hands by an individual or corporation. A factory held in common by the whole of society is no longer capital. Furthermore, the capitalist doesn’t provide capital by his own efforts alone - he needed the labor of others to plan, prepare, and build the factory in the first place.
I made no assumptions that every burger the grill cook produced would be sold. (I, too, slung the grease at a McD’s for a while after high school, back in the Bush 41 and Clinton years, and I saw how much waste went out the back door on a regular basis.) Nevertheless the basic argument still stands - even after accounting for waste, the value of the food sold far exceeds the value paid to the grill cook for her labor power.
They’re risking their own money via an investment, but that’s all they’re risking. Of course they’re going to want to make that initial investment back and then more money on top of that. But that’s a social construct, not a natural one. In a society geared towards meeting needs (like feeding people) instead of profit, where money isn’t needed to build, staff, and run a restaurant, that kind of risk is eliminated and the focus turns to other efforts involved.
That doesn’t mean it has no use value whatsoever. That’s the vital difference between use and exchange value - use value stays with the product whether it’s used or not, but exchange value is lost if the product doesn’t get sold. Herein lies a fundamental difference between capitalism and socialism - under capitalism the product doesn’t get used if the exchange value isn’t realized, whereas under socialism exchange value is done away with and the product gets used whenever and wherever it’s needed.
It’s arbitrary in that the amount paid is entirely at the whim of the employer, with no laws, statutes, or contracts in effect to enforce a minimum. Wages are whatever the employer can get away with paying.
