Comment by jujube3
2 years ago
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"
Sure, it costs more, and everyone agrees on that. Where we disagree is whether it provides more VALUE. The LTV says that it does by definition, because labor = value, and therefore more labor = more value.
You may choose to disagree. Just as modern economists disagree with the LTV.
You are completely wrong. This stupid example of digging holes is dismissed even in the first chapter of Das Capital if I'm not mistaken. First because if you do not provide use value (like digging useless holes), you cannot produce exchange value. Second because what really matters is the social necessary labor to dig the holes, assuming that there is a market for this. You will just waste money paying people to dig holes if we live in a world with technology to use backhoe excavator.
Economy is not a natural or exact science. There is a mainstream. But this does not mean that there is no valid inquiries and theories outside mainstream.
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The LTV effectively argues that competition brings prices of mass-produced commodities down to a magical threshold, and that magical threshold is the aggregate cost of labor in order to produce whatever commodity is being examined.
Modern economists haven't refuted this, and in fact many parrot it, and anyone saying they have rejected the idea is misinformed. See for instance https://bnarchives.yorku.ca/308/2/20101200_cockshott_nitzan_...
The LTV absolutely accounts for demand (what capitalists call "value") and in fact requires it for its description of how capitalism operates. It's really just saying there are two forms of value: aggregate demand and aggregate production costs, with competition driving prices down to production costs. If you don't agree with that, I don't really know how else to help because it's kind of a universal truth in a mass production market economy.
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.
That seems awfully.. tautological.
It's not tautological because it assumes that __management contributes nothing.__ Management's decisions about what to build in, how to build it, etc... are worth __nothing__ to Marxists.
Related: when Marxism was actually implemented, they had big problems with not building the right things, and building the things they did build poorly. For example a factory was assigned the task of building N pounds of nails a day, so they just built one giant nail that weighed N pounds (and was totally useless) rather than buliding what was needed. Because it turns out, management is actually needed and useful.
[And so are price signals, but let's take baby steps here!]
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good, glad i was able to get the point across...even for you! :~P
> "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
Look. The LTV has been rejected by mainstream economists. And this has nothing to do with Austrian economics (which has also been rejected by mainstream economists, for different reasons.) Now of course, you may choose to disagree, and say they're all wrong! But that's the current academic consensus.
It might be more valuable if they used construction equipment to dig it, rather than shovels. But that would mean acknowledging that "value" is different from "labor cost," which apparently is impossible for you.
Milton Friedman allegedly repeated
“You don’t understand, Mr. Friedman, this canal is a jobs program to provide work for as many men as possible.”
“Oh, I see. I thought you were trying to build a canal. If you really want to create jobs, then by all means give these men spoons, not shovels.”
Your "holes" example is a distortion (simplification and misinterpretation) of Marx's theory.
And it's the same idiotic one that comes up every single time. "MUDPIES CHECKMATE!!"
Nevermind Marx accounted for demand and markets when talking about cost of labor, but people love to strawman.