(OPE-L) Re: measurement of abstract labor

From: glevy@PRATT.EDU
Date: Sat Jul 10 2004 - 13:05:41 EDT

---------------------------- Original Message ----------------------------
Subject: measurement of abstract labor
From:    "Jurriaan Bendien" <andromeda246@hetnet.nl>
Date:    Tue, July 6, 2004 5:53 pm
To:      "Rakesh Bhandari" <rakeshb@stanford.edu>
Cc:      glevy@pratt.edu

Hi Rakesh,

You wrote:

"But for Marx value is in fact neither subjective nor objective,  based on
neither personal evaluations, however
aggregated, nor on the inherent properties of things. Value is thus
neither subjective nor objective; that is why we don't know where to have
it. Value is a social objectivity, a new kind of objectivity, a fused
category of objective idealism and physical realism."

I have a somewhat longwinded reply to that. It seems odd to say that value
is neither subjective nor objective. In that case, it sounds more like
phlogiston or orgone. I think the only way in which this statement can
make sense is to say that value is a (social) relation, but the question
then is

(1) what that relation is a relation between, and
(2) whether that relation exists mind-independently or not, and if so, in
what way.

I think that Marx used the term (economic) value in numerous, differing
ways (because he investigates different conditions of exchange and
different conditions in which value magnitudes can vary), but basically
Marx's "value" refers to a characteristic which people attribute to the
products of human labor, it is an attribute of products of human labor of
whatever kind. That attribute (or social construct) would not exist
without people making the attribution, but the point is that the attribute
exists independently of particular people, as a social fact. Consequently,

(1) (economic) value, which brings products in relation with each other,
presupposes the simultaneous existence of a double relationship, namely
between people, and between people and their products. That relationship
is objective, to the extent that it exists independently of any particular
human subjects. This objectivity expresses the social and physical
necessity for human co-operation as a group in an economic community, and
the fact that human beings are social beings, whether they like it or not.

(2) (economic) value exists prior to, and independently of exchange and
prices, historically and logically. Most of the total product (past and
current) of human labor available for use and consumption as property has
a value, but no actual price (at best a theoretical, ideal or hypothetical
price) because it isn't being traded. All price aggregation implicitly
refers to, and necessarily requires, a concept of economic value.

(3) (economic) value for Marx is a purely social characteristic, because
it refers to a valuation made in practice by people within human society,
and to which they adjust their behaviour.

But if value is an "objectified" social characteristic, that is because
these products really (objectively) took a definite amount of labor-time
and energy to make, which normally strongly influences the ratios which
products exchange (a third relationship, namely the relationship between
products). This physical fact means that, whatever subjective valuations
people may make, there are objective sublimates for prices and price
relativities, which set limits to the range within which prices can
normally move. In other words, the relationship between products is
governed by the double relationship I have mentioned. Exchange-ratios are
therefore also enforced by social norms, and these norms are objective.

This is mostly ignored in modern economics because it tends to abstract
from one-half of the double relationship, namely relations between people,
and looks instead mainly at the relation between people and their
products, or what is implied for this relationship by the relationship
between products. It assumes that relations between people of a given type
("rational market actors") exist, but doesn't discuss or explain them -
that is more a topic of other social sciences. This interpretation makes
economics a technical science and "the economy" a sort of "engine".

However, as soon as markets cease to be self-balancing, such that the
price-relationship between products of whatever type is disturbed, then
modern economics must resort to extra-economic factors to explain that
problem. The advantage of Marx's theory is, that by explicitly including
both sides of the double relationship involved in the existence of
economic value, that those "extra-economic factors" are not
"extra-economic" but are internal to economic science and explicitly
theorised. But that is because "economic" for Marx does not mean simply
"commercial" or "efficient trade", but refers to the allocation of human
labor-time and the expenditure pattern of human energy.

In addition, money as universal equivalent is an objectified means for the
exchange of products, and is thus a practical means for the conservation
and measurement of value in time and space, essential for regular trading
practices, and consequently also a practical means for claims or
entitlements to products of whatever kind.

An economy characterised by a universalised market (in which everything
has a price, or can have one) and dominated by the chrematistic activity
of capital accumulation, accomplishes in practice the reification of
labor, and makes the abstraction "just so much labor-time or so many labor
hours" in general possible. Labor therefore can become treated in practice
as an abstract value, which imposes social norms to which people adjust
their behaviour.

I take Marx's critique of political economy to be saying that the
necessary result of generalised capital accumulation in a universalised
market is the reification of human labor, meaning in the first instance
that human labor is in practice treated as a quantifiable quality,
separate and separable from human subjects performing that labor, a
process facilitated by the general use of money.

This is the primary sense in which Marx says that "people become dominated
by the products of their own hands and brains" - the exchange relations
between products of whatever kind begin to dominate and shape the social
relations between people. If this reification is reflected in economics,
that just means that one abstracts away from the social relations between
people and delegates that to some other science.

Social relations refer to relationships and interdependencies between
people insofar as they belong to a social group, relations between social
groups, and relations between an individual and a group. These relations
and interdependencies exist objectively, because they do not depend on any
particular human individuals for their existence. They exist because a
human being, as a social being, is part of social groups whether he likes
it or not, and these groups exists irrespective of what individuals may
think or do (Marx of course argues they influence what individuals will
think or do).

Marx suggests that labor-as-value has, dialectically speaking, both
positive and negative effects for human civilisation. On the one side, it
makes possible the most detailed economising of human labor through
meticulous accounting techniques, and consequently an enormous increase in
productivity. On the negative side, are the phenomena of the reification,
exploitation and alienation of human labor which Marx (not exhaustively)
describes, because labor becomes treated in practice as an abstract
quantity separate(d) from human subjects (is objectfied).

Labor-as-value means that labor becomes capital, a capital value, capital
in motion, variable capital, an accounting entry. Substantively the
reification of labor entails the inversion of object and subject, active
and passive, means and ends. Thus the human being as creative producer is
forced to view his own work as a means to an external end, and producers
themselves become a means to an end for which maybe they do not care much
at all or which they don't even know. Work becomes "just work" as a
"natural, obvious" reality without necessarily expressing anything anymore
about the true nature of the person. Harry Braverman referred to this as
the "degradation of labor".

Total reification such as accomplished by postmodernity means that people
no longer believe that they can collectively shape or reshape their own
society, the society they themselves have made and re-made, i.e. they feel
they have totally lost control over their communal life as citizens and
maybe can express their real nature only as consumers.

From Marx's own plans, it's clear that, despite important suggestions in
manuscripts, his social-scientific project is radically unfinished; he
didn't get round to a substantive theory of wage regulation,
share-capital, landed property, the state, foreign trade, the world
market, and
consumption. The dogmatic ossification of his thought as
"Marxism-Leninism", and the resultant fear of "unorthodox" innovation, has
meant that rather few theoretical advances were made consistent with his
theory. But that also means there is still plenty of creative work to do !

People who reject value theory, only do so while surreptitiously
re-introducing the concept "by the back door" so to speak in their choice
of price relativities which they deem relevant and important. Any careful
logical analysis of what people are saying when they discuss price
relationships shows that a concept of value always lurks in the
background, without which it would be impossible to talk about
price-relations and aggregations anyway.

I like to put it this way: there are billions of actual and ideal prices;
what justifies grouping particular prices and relating them to other
prices ? At this point, even the learned economist Alan Greenspan, steeped
in statistical knowledge, succumbs to mysticism and refers to Adam Smith's
"hidden hand", noting that the system of prices "does seem to work". But
obviously that is not the same as offering a coherent theory. At best, he
offers a pragmatic, flexibly adjusted, empirical eclecticism, but the
problem there is that almost any conclusion can follow from it. The
challenge for us is to devise theory which shows that not just anything
can happen and can explain why some outcomes are much more likely to
happen than others.

If Marx's theory has an advantage, it is that it seeks to provide an
internally consistent conceptualisation of economic value rather than an
eclectic one, offering the possibility of inverting the inversions to
which I have referred, and reconstituting human subjects as real subjects
rather than objects of capital.

It is true that capital value can be measured only in labour hours or
money(-prices), and the temptation is for an economist to say that,
therefore, we don't need any concept of value. But as I have said, a
concept of value is necessarily implied anyway, and all Marx does, is to
try and make the implicit explicit, showing exchange and trading relations
to be historically formed social processes.

I dissent from the opinion that Marx offers no theory of prices, because I
think he does:

- by offering a substantive theoretical explanation of what price is, -
because value relations explain relative price movements
- because it provides a coherent way of explaining those movements in the
sense of aggregate empirical results.

Moreover, I think a theory of value is also essential to developing a view
of a just and efficient allocation of labor, and of the products of that

Hence I think there is no way at all that the theory of value Marx sought
to develop in a consistent way will easily go out of date. At most you can
say that it is, as I have suggested, radically unfinished, because he just
did not discuss many important topics.

If you analyse what is meant by the concept of "corporate governance" it
is clear that it is premised on the separation of ownership of assets,
dispersed all over the globe, and the control over the productive use of
those assets in situ. That creates a problem of responsibility and
security, and then you have to "governance" that somehow. But as soon as
managers have to implement or conform to "corporate governance", then they
start talking about "value-based management" which refers to doing the
things that maximise share-holder returns. All of a sudden it then turns
out that "value" is an objective operative force anyway, referring to real
relationships which impose themselves and cannot be ignored.

In Marx's theory, utilising the concept of surplus-value (practically
speaking, the net income yield on value added regardless of any particular
economic source), that is of course perfectly explicable, but the point
here is that in practice intelligent managers do not get away from using
the concept of value either, even if they have their heads stamped full of
neo-classical economics which says value is "just whatever somebody's
subjectively prepared to pay for a good or service". In the real world,
"the market" doesn't simply offer freedom to buy and sell, it also compels
sale and purchase. It's precisely this necessity to buy and sell which
makes an economic science possible.

I think it's best though to say Marx did not have the last word to say
about the theory of economic value - see e.g. the works of Mauss, Gersh,
Uno, Graeber, Malinowski and so on.



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