Comment by jmyeet
2 years ago
There is no value without labor.
This was recognized by everyone from Karl Marx to Abraham Lincoln to Adam Smith. Smith even conceded that profit was impossible if workers retain their surplus value, which is exactly the point.
I bring this up because that's what capitalism is: draining the surplus labor value from workers to the capital-owning class. In feudalism, the artistocracy and th emonarchy extracted that value. Jeff Bezos is the new king.
Why do I mention this? Because it wasn't that long ago that this view was universally accepted. The Red Scare post-WW2 spread a lot of damaging propaganda that has led ordinary people to fight for the ultra-rich to have even more money, to their own detriment.
Walmart killing all your local businesses then leaving, leaving you in a food desert with a Family Dollar store maybe. That's capitalism. Locally-owned businesses. That's socialism. Monsanto agribusiness? Capitalism. Family-owned farms? Socialism.
Something like Mondragon shows that large-scale cooperatives can work. And the reason why these sorts of things aren't more prevalent is that laws are passed to make them difficult to set up or outright illegal. Many US states outlaw municipal broadband, for example.
And any country in the last 70 years that even thinks about nationalizing resource extraction finds itself having a coup that nearly always has the CIA's fingerprints over it.
Or we simply starve them to death under the sanitized euphemism of "economic sanctions" (eg Cuba, Iraq, Venezuela). I really want people to understand that we're not doing this for any moral reason. We're doing it at the behest of Western companies who would prefer to steal the riches of these countries.
Co-operatives can go a lot further than manufacturing too. It can be a solution for housing. Housing cooperatives cut out landlords, who are rent-seeking both literally and figuratively.
> There is no value without labor.
While this is generally true, it's also not the entire equation. For example, there's no gain without risk.
- When I work for someone else, I am offloading some of the risk to that person/owner. When someone starts a company and hires other people... if the company goes belly up, the founder loses their investment; the workers find another job.
- When I rent from someone else, I am offloading the risk of owning a property to someone else. If I get a job across the country, I don't need to sell my house at a loss to move.
None of this justifies people making insane amounts of money while others are starving. But neither should the worker expect to reap all the benefit unless their also willing to take all the risk.
> the founder loses their investment
So does the bank, and the state that (more often than not) subsidised said investment through diverse vehicles. If the bank goes belly up, we've seen what happens, we collectively contribute to save them... because we're collectively sharing all the risk of investment in our financialized economies.
I agree that some people don't want risk and others do, but as soon as you start sharing ownership that dichotomy simply disappears.
We don't collectively contribute to save shareholders. When a bank goes under the depositors are made whole through government insurance programs. Shareholders get nothing.
In 2008 I believe bailouts did go to companies to keep them afloat (and thus helped shareholders). However, TARP returned a small profit for the government, so it didn't end up being a gift of free money overall imo. (reasonable people can say that the bailouts were excessive and introduced moral hazard for sure).
Sure, but using tax-payer money to save malfunctioning banks is pretty much the opposite of capitalism.
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> When I work for someone else, I am offloading some of the risk to that person/owner.
Workers generally risk their lives or simply injury. Owners "risk" capital. I put that in quotes because our government is typically set up to rescue failing businesses and by that I mean bailing out the owners. If the business fails, the owner simply has less money or they have to become a worker.
So who is really taking a risk here?
> When I rent from someone else, I am offloading the risk of owning a property to someone else.
We shouldn't treat housing as an investment vehicle. It is shelter and necessary to live. Every level of government is subordinate to the cause of increasing property prices as society increasingly views housing as a vehicle to build generational wealth.
The majority of housing in vienna is state-owned (so-called "social housing"). Any kind of state housing has been successfuly propagandized as a "slum" ("project") but there's no need for that to happen. The UK, prior to Thatcher coming along and dismantling the whole thing, almost completely got rid of landlords simply by being the buyer of last resort for owners that wante dto sell.
> None of this justifies people making insane amounts of money while others are starving
Our economic system is predicated on withholding basic needs for profit.
> If the business fails, the owner simply has less money or they have to become a worker.
The fact that you consider "losing everything you've saved up for your entire life, plus what you've borrowed, and destroyed your ability to borrow more" as "simply" is... mind boggling to me. I would rather work for someone else than risk losing everything by starting my own business (plus I prefer to develop software rather than run a business); that risk is _way_ beyond what I'm comfortable with.
Companies go bankrupt all the time.
> Our economic system is predicated on withholding basic needs for profit.
An economic system based on "to each according to his need" has been tried many times. It fails to deliver.
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There is risk to capital. The government does not bail out every business that fails. That's ludicrous. Investors like VCs can and do lose their investments all the time with no government intervention whatsoever. An owner is also risking in terms of opportunity cost - time lost to starting a business and failing is inherently riskier than working with similar talents and investing in safer assets like index funds for the potential upside of higher returns if the business succeeds.
Bootstrapped companies also come with risks to the founder's own capital and credit risk if loans are taken and the business fails to generate revenue to service them.
Depends on the field what you risk. Many white collar jobs will not risk their lives or injury, plus nowadays regulations should reduce these extreme risks.
Saying "owner simply has less money" can have many implications on their life. If they choose to put money in a company rather than have a bigger apartment/TV/car/whatever, I find it fair for that to be rewarded a bit.
I think it is disingenuous to think "basic needs" is simple to define, considering that there is no cheap and free energy source (and other resources). For someone living in a warm climate, the basic need for heating in north of Europe will look like a waste.
My opinion is that tax systems are completely outdated and they should use more "asymptotic/exponential/complex formulas". Sure a tax of x % on profit worked 100 years ago when most people were "closer" but with today's growth (of many things), you get too much concentration. But of course that would imply that people understand both tax and math, so most will not demand it.
What are you suggesting as a better system?
To withold basic needs for profit, you need to be able to provide basic needs in the first place.
All of the alternatives I know of can't even reach that point.
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The nuance in this argument is that everybody shares risk.
Workers take risk not only of the financial kind (choosing to take a job at company A instead of B is a bet), as well as physical risk most times.
If we believe shareholder of a oil company is taking more risk than the worker in a platform, we value capital more than labour.
Not to mention, non-owner workers still bear some risk by virtue of the fact that they can be terminated at any time without cause. This in itself is a financial risk, as being without employment or income for an extended period of time can be financially devastating.
If we want to play the "risk grants ownership" game, then we have to be honest: at some point, the risk of the initial investment is paid off, and the risk the employees take on collectively matches or exceeds the risk of the investors. If we're being logically consistent, ownership would transfer as these risk pools shift. But we're not consistent, and our system doesn't value risk, it values capital.
there is a risk for the worker and renter, too. and opportunity costs.
my shelter not being destroyed is extremely more important to me and my life than my landlord who has insurance for such things, especially in a place with a housing vacancy less than 1% (aka very very hard to find housing). if i leave, they will have no problem finding a tenant to take my place. any repairs and maintenance are essentially paid for by my rent. they raised property taxes? no problem, just raise rent...
from my POV, seems like a low risk investment to be a landlord.
Other than the risk of being evicted from your rental, a homeowner has most of the risks of a tenant, plus more. And there are a fair number of protections for renters to lower that risk. There are some risks of the landlord being a bad player, which makes the renter's life worse.
The landlord has the risks that the renter doesn't (that a homeowner does); which is risk offloaded from the renter to the landlord. The landlord then has the risks of the tenant being a bad player, which can be extremely financially risky (worse than being fired from your job).
> from my POV, seems like a low risk investment to be a landlord
Your point of view is extremely far from the truth. Especially for landlords that have one or a few places they rent out, it can be extremely risky. Everything from tenants just deciding not to pay (and taking a year+ to evict) to a Pacific Heights situation, where the place is destroyed with no real recourse. Or, on the lower end, tenants just leaving the place in bad shape, with bugs/mice/whatever; that itself can cost tends of thousands of dollars to recover from.
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Places with 1% vacancy rates only exist when the government prevents more housing from being built, or makes it unprofitable to be a landlord.
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> There is no value without labor.
Yet wine is higher valued than grape juice.
Value can clearly exist without labor.
Winemaking requires far more resources, labor, skill and time than simple grape juice production.
Resources and time are, obviously, not labor.
Turning commodity grape juice into commodity wine requires no appreciable extra labor compared to the required labor to prevent fermentation.
The grape juice vs. wine is a rather classic counterexample, but it's hardly difficult to come up with any number of other examples of value absent labor.
Winemaking uses far more, but does it really have to? Does the $10,000 bottle of wine really that much more labor in it to justify that price? or are value and labor only loosely related? If I get lucky and find some diamonds on the ground, have I labored a lot for the value of those diamonds on my patch of dirt compared to your patch of dirt. There's no value with absolutely zero labor, sure, but there's clearly a difference between a carpenter making 100 chairs, and a programmer making 100 copies of a program they wrote.
Grapes will naturally ferment themselves into wine over time, but grape juice essentially did not exist until the industrial revolution because we needed methods to prevent the fermentation. [1]
[1] https://en.wikipedia.org/wiki/Grape_juice
> There is no value without labor.
Plausible.
But there is very little value without tools. In fact, one could argue that all material progress has been in the form of better and better tools. One person with a combine beats 100 people with sickles.
Those tools are necessary for almost all of the value that labor produces.
So if we want those tools, in the real world we need to pay the producer of those tools. (Or make them ourselves, which is possible, but runs into division-of-labor issues.) The people who manufacture combines aren't a charity; they want to receive the value of their work too.
And unless the farmer (or custom cutter) has the money to buy the combine, then there's a third party in the situation - the capitalist, the person who provides the money to buy the tools that will give the increased productivity. That person usually isn't a charity, either. They need to get some return on their money.
But the place where I at least partly agree is this: The worker who knows how to use the tools is deserves at least part of the value provided by using the tool. The tool-maker deserves part of the value; the capitalist deserves part of the value; and the worker also deserves part of the value. (If you don't like the word "deserves", well, without all three parties, the value isn't produced, and none of the three are charities, so if we want the value, we need to give them part of the returns.)
And currently, you can make a very solid case that the worker is getting the short end of the stick. I can't buy "the worker deserves it all". No, the worker does not. But I can agree that workers deserve more than they're getting.
(In the cases where the workers either make their own tools or have the money to buy them, this argument breaks down. But in an industrialized society, that seems to be the exception, not the rule.)
> But there is very little value without tools.
Did those tools magically come into existence? Or were they made? Who made them? More workers. Where did the materials come from? More workers.
The point here is that everything we as a society do is so fundamentally interconnected that thousands of people contributed to pulling gold out of a mine, for example, both directly and through the tools that were created to make it possible then why are we concentrating the proceeds of this enterprise onto the capital owner who got a lease from the government (with the threat of violence backing it) just because they wrote a check to fund the operation?
> ... there's a third party in the situation
Yes, more products of labor.
> I can't buy "the worker deserves it all"
I don't believe you intended it this way but it reads as a false dichotomy.
I don't expect radical change in our economic system. I would be happy to see more cooperatives for housing and manufacturing (like Mondragon). This requires some class consciousness and collective action.
So much of our modern society deifies hyper-individualism. You ever wonder why that is? It's sold as "freedom" but it's really to manipulate you because there's a massive power imbalance between your employer and you. If you withhold work, most likely that employer will be fine. If that employer withholds work, you might end up homeless. The only way to counter that power imbalance is with collective action.
Modern political discourse is dominated by manufactured culture war issues. This isn't new. Post-Civil War there was fear in the South of emancipated slaves and poor white people uniting [1].
To be absolutely clear, I'm not accusing you of racism or similar. My point is to show how this is manufactured to divide workers. Even the idea of the "middle class" is intentionally divisive. Why do the interests of a white-collar (middle class) worker differ from a blue-collar (lower class) worker? Why are we making that distinction?
[1]: https://bittersoutherner.com/from-the-southern-perspective/m...
I'm pretty sure your economic terms are not what the consensus of professionally trained economists would say.
>>>Locally-owned businesses. That's socialism. There is definitely nothing in the definition of socialism that says everything is locally-owned. Moreover, that can be a way to end up with things like Redlining and other institutional racial issues.
>>>There is no value without labor. The great thing Marx did was show that everything could be converted to a value measured by labor. But, economists afterwards showed that once you have that conversion, you can do it literally with anything. We could have a system based on the number of bumblebees required to build a house. That is a normative judgement that labor is somehow special.
Now, our current implementation of Capitalism is clearly wreaking havoc on our environment. But it has brought the standard of living up across the entire world past a Malthusian cycle of more food means more people, means they eat the food, and we have starvation.
The same can be said for current implementations of Communism all across the globe.
Lastly, cooperatives may be a great solution for a lot of manufacturing and housing challenges. And when you get to the scale of a country, a co-op is just a government, and a capitalistic democracy feels a lot more like a co-op than a dictatorship or authoritarianism even with all its pitfalls. A populous who then really starts to demand through votes that we change to improve the blight of our fellow humans seems an even better place to live, if we can just get there.
> I'm pretty sure your economic terms are not what the consensus of professionally trained economists would say.
It's an oversimplification to highlight the main point: workers' relationship to the means of production. In capitalism, capital owners own the means of production. In socialism, the workers own the means of production.
IME most Americans not only don't know what socialism is (despite being opposed to it), they don't know what capitalism is either (despite supporting it).
> Now, our current implementation of Capitalism is clearly wreaking havoc on our environment.
It's doing an awful lot more than that. It's pillaging the Global South. It's impoverishing us under the massive weight of housing, medical and student debt. And it's quite literally killing people. People decry the failures of the USSR, for example, but 9 million people die of starvation every year. Why isn't this attributed as a failure of capitalism in the same way?
Because the failures of the USSR occurred entirely within the USSR's borders, under its jurisdiction, and were entirely within its power to resolve. Meanwhile, the 9 million deaths of starvation you cite are across multiple countries with multiple overlapping legal regimes and are multi-causal, from corruption to war and failed states like Haiti and Syria.
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> our current implementation of Capitalism is clearly wreaking havoc on our environment
Communist countries are the most polluted ones.
"communist" countries are simply countries that are still operating within Global Capitalism that happen to be run by parties that are made up of communists. They would also freely admit that. There are no communist countries because communism isn't here yet.
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>>> Locally-owned businesses. That's socialism.
>> There is definitely nothing in the definition of socialism that says everything is locally-owned. Moreover, that can be a way to end up with things like Redlining and other institutional racial issues.
I read the OPs post as an example of propoganda (mega corp - capitalism, small company - socialism) not reality.
Same here. It's to display the hypocrisy of those in power who declare things in their favor as beneficial and those that are not beneficial as harmful and bad.
In reality it's almost the opposite, it's bootstrap capitalism for the little guys, and "socialism" and government handouts for the ultra wealthy. (I put socialism in quotes because this term is extremely commonly misused.)
How much labor were they putting into those 1960s California starter homes!?
> Co-operatives can go a lot further than manufacturing too. It can be a solution for housing.
An interesting example of this in an article published yesterday (a housing/renovation co-op operating in Baltimore).
https://www.theguardian.com/business/article/2024/sep/03/wat...
> There is no value without labor.
is this a serious statement?
He's a Marxist and believes in Marx's labor theory of value.
https://en.wikipedia.org/wiki/Labor_theory_of_value
As wikipedia says, "modern mainstream economics rejects the LTV" (for very good reasons). It leads to some pretty obvious absurdities if you take it seriously. For example, 10,000 people digging holes should be more "valuable" than one guy designing a microchip, because hey! The holes take more labor.
Nice try, but getting 10,000 people to dig holes (e.g. gigantic infrastructure projects) ends up costing much more than what it takes for "one guy" to "design a microchip"
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This is a common misinterpretation of the labor theory of value. I understand it like this:
I am a capitalist and my money goes to pay labor to create a thing that I sell in a market. The workers create thing in the production process. I have captured a portion of the labor's true value based on the market, bringing me profit - what Marx called "surplus value."
I turn around and reinvest that profit into another business that brings me more profit. Rinse and repeat, forever.
But that profit is nothing but a portion of the labor's true value as reflected in the market price, and therefore the labor created the value. The market did not create the value. The market decided on a price to pay for the value created by the labor.
Much like "machines all the way down", value is labor all the way down.
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> "modern mainstream economics ..."
It would be more accurate to say "modern mainstream economists". To say "economics" here is a real failure on Wikipedia's moderation. Because what they're actually talking about, is the Austrian School of Economics [1]:
> The Austrian school is a heterodox[1][2][3] school of economic thought that advocates strict adherence to methodological individualism,
"Individualism" is the key part here because it betrays the intent, which is to disempower people from acting collectively, such as by forming unions. This is a key tenet of classical liberalism so an appeal to authority like "modern mainstream economics" we're really just saying "neoliberalism".
Neoliberalism isn't a neutral account or critique of capitalism. It wholly embraces capitalism as a solution to all problems. Neoliberalism can pretty much be summed up as weaker/smaller government (because it hurts profits) and indivudalism (because collective action hurts profits).
> 10,000 people digging holes should be more "valuable" than one guy designing a microchip
That's an asinine example. I mean what hole are they digging? If it's the Panama Canal, that's pretty valuable. Also, the example of one person designing a chip goes to the heart of the problem that LTV addressses. What does that design do? Well, nothing. It only has value if you make something with it you can sell (or you sell it to someone who does). You want to fab it? Well, TSMC involves a lot of labor. ASML involves a lot of labor. The materials required require a lot of labor.
Plus there's the issue that the chip design itself is intellectual property, which itself is an enclosure (in the capitalist sense).
Everything we as a society is so fundamentally interconnected that it's arbitrary and selective to attribute the value created to a tiny few. And it's done for the gain of the few at the expense of the many.
[1]: https://en.wikipedia.org/wiki/Austrian_school_of_economics
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Your "holes" example is a distortion (simplification and misinterpretation) of Marx's theory.
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Not only is it serious, it’s the central argument of all political systems since there have been political systems.
Most likely a message that's lost on anyone offering oblations while facing Cupertino everyday.
More importantly, a message lost on an audience who largely is dreaming of being one of the exploiters.
Yeah, but my blood sugar was pretty low when I wrote that comment so I may have been more sarcastic than necessary.
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> There is no value without labor.
True, but there is also no value without investment and risk. Marx's failure was ignoring the other two ingredients.
Marxism is building a road with hundreds of laborers with shovels. Capitalism is one guy with a bulldozer.
P.S. Cuba has no riches to steal.
Cuba’s riches are Florida’s electoral votes, often hinging upon the sentiment of the exiles in Miami-Dade County. Plus, their whole cigar thing.
Marx wrote a gigantic book called Capital and it provides a thorough analysis of investment and risk. He wrote a great deal of words describing how investment relates to surplus value (hint: investment is simply a capitalist's way of generating surplus value - profit, which is then used to generate more surplus value, which is... you understand the systemic contradiction here, I hope). You should probably read it if you want to discuss it!
From the same genre I like Grimms' Fairy Tales more. They seem more realistic.
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I enjoyed reading Toliken's fantasy LODR very much, but my attempts at reading Marx's fantasies felt like hammering a nail into my skull.
The attempts at implementing Marxism all ended in misery and famine. What more would anyone need to know about it?
BTW, a capitalist investing money also entails risk. How it works is the more risk, the more potential reward. Does Marx account for risk? I ask that because the Marxists I hear never mention the essential role risk plays, they usually just assume there is no risk.
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Surplus-value as a notion is frankly completely barking mad, and bred from a mix of multiple different fallacies mixed together including the labor theory of value.
In what universe does water by the river cost the same as water in the middle of the Saharra desert? A plant worth the same whether it is local or highly exotic? Where buying lumber at $300 a cord to burn fair, but buying it for the same $300 a cord but operating a warehouse selling it for as so much as $301 a cord retroactively somehow robbing the lumberjack? The madhouse world of surplus-labor-value! Boy, if Lewis Carroll had a field day with imaginary numbers then he missed truly golden opportunities of exploring an utterly mental system which demands fixed globally perfect valuations to avoid exploitation!
> In feudalism, the artistocracy and th emonarchy extracted that value.
Feudalism was in some ways a bit kinder, because part of the basic arrangement was the expectation that the nobles would protect the peasantry (for pragmatic that's-where-the-food-and-supplies-come-from reasons, not ethical ones). Capitalism has no such expectations or incentives.