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I Want To Believe (in Marx's Labor Theory of Value)
Content warning: this post contains MARXISM. If seeing Marx's massive beard or even hearing his name is too traumatic for you, stop reading now.
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Recently I found one interesting article, not interesting in itself, but how it illustrates arguments about psychological necessity of faith and belief frequently discussed here.
Yes, it is Marxist article written by professional Marxist in Marxist journal. Last chance to avert your eyes from forbidden lore is now.
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Yes, it is very obscure, but if post about civil war in furry community can pass there, this might too.
If you are interested how I got there, the route was Anatoly Karlin -> devcroix -> journal article by distinguished academic historian -> academic journal dedicated to Marxist theory
Was Stalin a Marxist? And If He Was, What Does This Mean for Marxism?
(tl;dr: yes he was, it means lots of things for Marxism, none of them nice)
This is not the article I wanted to share.
This is the article.
Unfree Labour and Value Productivity: Challenges for the Marxian Labour Theory of Value by another academic, not distinguished enough yet to deserve his own Wiki page.
So what is it all about?
Labor theory of value(LTV), the cornerstone of Marxist thought. If LTV fails, whole Marxism crashes to the ground.
Narrator voice: it failed, it was debunked many times, starting in 1890's. Somehow, it had no effects on world historical events of 20th century.
So, what exactly is this article about?
According to Big Beard Man's theory, it does not. (Practical Marxists later strongly disagreed, but this is not topic of this article)
But why is it? (except that Marx said so) What is the distinction between wage and slave labor, slave and animal labor, animal and machine labor?
Author examines these distinction, and finds them rather arbitrary.
No need to read 40 pages of Marxspeak(I hadn't either), this table summarizes the argument and the dilemma.
So, Marxist author in this article deboonks cornerstone of Marxist philosophy and watches the whole thing tumbling down in its own footprint like the towers on Nine Eleven.
This had been done many times before, this is not the importance of this article, the importance is in his last sentences.
It is not about materialism and science, it is about faith.
The author still has faith, still needs to believe, still wants to "stick with Marx", still wants to "affirm" the tenet he just destroyed, still considers himself Marxist and begs desperately fellow professional Marxists to help him (these are the only people who would ever read this journal, I am possibly first non-Marxist to stumble on this article)
This is completely natural human behavior. Rationalist credo "That which can be destroyed by the truth should be" is deeply abnormal for human beings.
Are you laughing at him? This is exactly the same thing as all who people who wish wistfully "if only I had faith in God" "if only I could belong to Church".
the persistently high cost of service sector goods lends some credence to a form of labor theory of value. It does not explain why Saylor Swift earns so much (it's not like she works 1000x harder or puts in 1000x more hours) but it explains why plumbers still can charge a lot even if there is competition.
She provides more than 1000x the value. Do the same exact production, with the same exact experience, but substitute Taylor Swift with a random woman singing the same exact songs. How much of the stadium would be full? How much would each ticket go for? I would say much less than what it is now.
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That only seems to present a problem if we assume all labor is the same value.
If we assume some labor can be more scarce than others, say an expert or those with exceptional natural talent, the situation resolves itself.
But, what is scarcity, but a description of how much effort (labor) is required to obtain something? The record companies probably do put in 1000x the effort to recruit someone like Taylor Swift. Talent scouts, marketers, etc. Of course the LTV requires people be willing to expend labor in exchange for the product. But, the record companies only expend the labor cultivating talent because they expect to receive value in return. The labor required to create a talent acts more like a price of production on a standard economic graph. Products that return less value than required to create simply flop and don't stay on the market very long.
If we've described scarcity in terms of labor, I think the labor theory of value holds together, although I think it does become one of those equations where you can solve for any of the variables.
This seems backwards. You're arguing that people are willing to trade lots of labor to recruit Taylor Swift because they expect to receive value in return, which implies that she creates tons of value above and beyond the labor she actually outputs. Or rather, there is high demand for her labor in particular, meaning labor alone is not just a source of value, but depends on other factors such as skill, and consumer demand.
Value is created by a combination of skill/knowledge/organization, labor, land, and customer demand. Once you introduce enough of these factors and mutate your "labor theory of value" to be robust and accurate and account for all of this and related factors... you just have normal economic beliefs and aren't a Marxist anymore, and none of the Marxist claims about inequality follow.
I'm not sure you can separate it quite like that. You can boil the current demand for Taylor's labor down to the results of the previous labor (voice training, practice, focus groups, marketing, etc). Or, really, the 3 hours spent at a concert isn't the only labor being sold, it's the cumulative labor that was required to create that concert.
Which would explain why skilled labor pays off so much more than unskilled labor. A skilled laborer is selling the labor they spent training over and over again, whereas the unskilled laborer only sells the labor they are currently preforming.
This is kind of what I was trying to get at towards the end of my post. It really feels like you could boil down all of economics to any of the inputs, as you can generally convert them to each other (if nothing else, then by converting to money first). Not entirely sure how useful it is at that point though.
It's possible I should have been more clear and direct, but I was talking about LTV in the abstract, not specifically about marxist principals. LTV is also associated with Adam Smith.
I, personally, think Marx's ideas were disastrous, but not really because of LTV. I think they were disastrous because they tend to destroy very important incentive structures which end up destroying most of the value in a society.
LTV, on the other hand, seems like not that bad of a take for someone operating in the mid 19th century (and a pretty good take for someone operating in the late 18th century like Smith was).
It was bad take even back then. A common counterargument used was that of literal gold digger during Gold Rush who lucked out and struck gold vein on his very first day. It is easy to understand example showing that value is created by demand as opposed to some "unit of labor". Of course there are other example of where value is created by some cosmic luck besides finding mineral riches or ancient treasures buried underground - ideas being another prime example. A lot of transformative scientific or product ideas were invented randomly or as a byproduct of something else, they are product of talent and circumstances. LTV was dead on arrival.
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I think it's like half of the puzzle. Or maybe slightly less. It's almost equivalent to the "Supply" half of "Supply and Demand". Which means that it's ignoring demand. A pizza rotting in a warehouse takes the same amount of labor/talent/capital/ingredients to produce as a pizza in a highly popular restaurant. Lots of Soviet failure stories involve factories producing tons of unnecessary items that ended up unused because they were being measured according to oversimplified metrics. Tiny nails when measured by quantity produced, gigantic nails when measured by gross weight. Food rotting in warehouses instead of being distributed because someone forgot to care. You can make two products with nearly identical amounts of labor, skill, and ingredients, and have wildly different output value based on which of them is actually needed by the people around.
In a sufficiently competitive market where there are lots of fungible inputs, lots of people who could perform the same tasks, lots of customers who want whatever is produced, and the outputs themselves are mostly fungible, then yeah, the price of goods will drop down to approximately the price of its inputs, which can convert to labor. Which basically says that if you simplify and fix Demand as a constant, and fix all of the non-labor parts of Supply, then labor is all that's left. It's an important component, and certainly better than having no economic theory whatsoever, but you need to actually satisfy customer desires if you want to actually create value.
I think that's only because you're only focused on Marx's side of theory.
Smith's theory is about the labor the buyer is willing to expend to obtain something. To quote the wealth of nations:
Which, I think is the other half that you're missing.
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