Wednesday, April 1, 2015

The Labour Theory of Value and Animal Labour

Marx’s labour theory of value (LTV) in Volume 1 of Capital states that the exchange value of commodities is fundamentally caused by socially necessary labour time (SNLT). SNLT is supposed to be a cause of real world individual exchange values and prices. It is well known that there is a severe and blatant contradiction between volume 1 (1867) and volume 3 of Capital (1894). By volume 3 of Capital, Marx has retreated into a position on the relation between labour value and price where it only holds in a grossly unrealistic state where the profit rate is equalised and individual prices above or below labour values will cancel each other out in the aggregate to make the prices-equal-value equation hold.

But my comments below cut much deeper than complaints about the internally inconsistent and contradictory aspects of Marx’s work: they are a fundamental critique of the very conceptual coherence of Marx’s LTV and the idea of human SNLT.

In what follows, let us assume that the LTV is meant to be an empirical proposition and not some analytic statement (where it would true by definition, tautologous and empirically empty).

If the LTV is asserted as an empirical proposition, it seeks to explain empirically how the labour value in commodities is created.

I have already pointed to a fundamental problem identified by Piero Sraffa:
“There appears to be no objective difference between the labour of a wage earner and that of a slave; of a slave and of a horse; of a horse and of a machine, of a machine and of an element of nature (?this does not eat). It is a purely mystical conception that attributes to human labour a special gift of determining value. Does the capitalist entrepreneur, who is the real ‘subject’ of valuation and exchange, make a great difference whether he employs men or animals? Does the slave-owner?” (Sraffa, unpublished note, D3/12/9: 89, quoted in Kurz and Salvadori 2010: 199).
The fact is, as Sraffa notes, labour power in production is not limited to human beings: historically and to this day, animal labour was, and still is in developing nations, a fundamentally important source of labour power.

if Marx’s abstract socially-necessary labour time (SNLT) units were meaningful measures of every type of heterogeneous, concrete human labour, then many types of the labour performed by animals ought to be measurable in terms of SNLT units too, especially when human labour can be substituted for animal labour (e.g., horse mills could be replaced with mills where humans do the work, ploughs can be pulled by humans, and so could carts or carriages).

Why does a coherent, empirically grounded theory of labour value exclude animals? This is exactly the point that Piero Sraffa is raising in his criticisms of the labour theory of value.

And there many other questions too.

Marxists might complain that animals do not sell their labour and are owned by humans and are a type of capital good. But so what?

We could easily imagine a counterfactual situation in which large numbers of people in industrial economies do not sell their labour, are enslaved and worked to death to produce commodities, and treated as capital goods. Would the commodities produced by slave labour cease to have a SNLT value? If slave labour does still have a SNLT value, then it follows that even if people receive no wages and are owned as slaves, then this doesn’t change the fact that they produce labour value in commodities.

But we can say the same thing about animals: animals receive no wages either, so why does their labour not count as SNLT?

One could go on to argue that animals can’t speak or spend money, but one could easily imagine counterfactual situations in which humans are made to work without spending money or or never taught natural human language. Would their labour cease to create SNLT?

Finally, it is no good for Marxists to fall back on an analytic definition of the LTV, where it is just true by definition. I have no reason to accept an analytic definition I think is incoherent and not empirically relevant.

We can see here how the LTV has severe conceptual problems from the very beginning.

Kurz, Heinz D. and Neri Salvadori. 2010. “Sraffa and the Labour Theory of Value: A Few Observations,” in John Vint et al. (eds.), Economic Theory and Economic Thought: Essays in Honour of Ian Steedman. Routledge, London and New York. 189–215.

Philip Pilkington on the Labour Theory of Value

Philip Pilkington (who, alas, is now no longer blogging on Fixing the Economists) has some interesting critiques of Marx and the labour theory of value here:
Philip Pilkington, “Marx, Hegel, the Labour Theory of Value and Human Desire,” Fixing the Economists, August 13, 2013.

Philip Pilkington, “Was Marx Right?,” Fixing the Economists, March 31, 2014.

Philip Pilkington, “Joan Robinson and the Labor Theory of Value,” Fixing the Economists, August 7, 2013.

Philip Pilkington, “Why Sraffa’s Theory Does Not Contain a Labour Theory of Value,” Fixing the Economists, May 6, 2014.
Also, very interesting are his arguments in debates with Marxists on the labour theory in the comments sections of these blog posts:
Matias Vernengo, “Sraffa and Marxism or the Labor Theory of Value, what is it good for?,” Naked Keynesianism, August 14, 2012.

Vienneau, Robert. “Vocabulary For Marxism,” Thoughts on Economics, July 8, 2012.
One of his good examples of how subjective value and advertising have a major role in explaining price is as follows:
“I recall pointing to advertising a number of times and saying that this added value to commodities without any additional human labour.

I had a long argument with two Marxist economists about this and came up with a great example:

Two pairs of runners are made in the same Chinese factory. The inputs are identical -- including labour time. However, one pair gets a little tick stitched onto it and are seen in magazines being worn by Michael Jordan. The other have a little star stitched onto them and are sold in WalMart.

The pair with the tick are sold for four times as much as the pair with the star.

The Marxist economists couldn’t really fault my logic. Without recourse to the idea of false consciousness, or some other moral/metaphysical concept, the labour theory of value can say nothing about any of this.”
Philip Pilkington, July 10, 2012
Some Marxists might reply that the “use values” of the two shoes are different: the one worn by the famous sports star now has a different use value because it is a status symbol.

While one might defend that idea, subjective and intersubjective value are the major forces driving and underlying this difference in demand and price.

And even if a Marxist wants to defend the “use value” explanation, it simply will not work, because Marx says clearly that exchange value is not determined by use value. When Marx explains why two commodities have a given exchange value, he argues they are equal and have a common element but the exchange values are not caused by differing use values, but labour value:
“This common element cannot be a geometrical, physical, chemical or other natural property of commodities. Such properties come into consideration only to the extent that they make the commodities useful, i.e. turn them into use-values. But clearly, the exchange relation of commodities is characterized precisely by its abstraction from their use-values. Within the exchange relation one use-value is worth just as much as another, provided only that it is present in the appropriate quantity. Or, as old Barbon say: ‘One sort of wares are as good as another, if the value be equal. There is no difference or distinction in things of equal value … One hundred pounds worth of lead or iron, is of as great a value as one hundred pounds worth of silver and gold.’

As use-values, commodities differ above all in quality, while as exchange-values they can only differ in quantity, and therefore do not contain an atom of use-value.

If then we disregard the use-value of commodities, only one property remains, that of being products of labour.” (Marx 1982: 127–128).
We can see the argument better in a translation from the German that is more idiomatic English:
“‘This common factor,’ … ‘cannot be a geometrical, physical, chemical or other natural property of the commodities. Their physical properties come into consideration for the most part only in so far as they make the commodities useful, and so make them values in use. But, on the other hand, the exchange relation of commodities is obviously determined without reference to their value in use. Within this relation one value in use is worth just as much as any other, if only it is present in proper proportion.’” (Böhm-Bawerk 1949: 10).
For Marx exchange value is not determined by use-value, but by abstract labour time. If two different types of shoes as goods have the SNLT, then they ought to have the same exchange value. But that is clearly not the case.

The business can charge a larger mark-up on one pair of shoes worn by a celebrity and people will buy it because of subjective and intersubjective value and demand.

The SNLT is irrelevant here, and does not determine price. In commodity after commodity, you could demonstrate the same thing too.

Böhm-Bawerk, Eugen von. 1949. “Karl Marx and the Close of His System,” in Paul. M. Sweezy (ed.), Karl Marx and the Close of His System and Böhm-Bawerk’s Criticism of Marx. August M. Kelley, New York. 3–120.

Marx, Karl. 1982. Capital. Volume One. A Critique of Political Economy (trans. Ben Fowkes). Penguin Books, Harmondsworth, England.