[OPE-L:453] Re: International value.

Steve.Keen@unsw.edu.au (Steve.Keen@unsw.edu.au)
Wed, 8 Nov 1995 13:57:42 -0800

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Looks like I'm going to be busy--and probably under attack -:(--
on OPE-L today, so I'll start with the least controversial
of my posts (replying to Makoto and John) on complex
labor and value creation. And I doubt that this will be

This post concerns the problem of the reduction of skilled labor
to unskilled.

This problem was actually solved by Hilferding in his reply
to Bohm-Bawerk. This fact has been missed by subsequent
marxists because, in the early part of his reply, Hilferding
actually seemed to dismiss the system of logic that he later
used to successfully solve the reduction of skilled labor to

This logic is what I have elsewhere called "the dialectic of
the commodity", which revolves around the distinctive use
to which Marx put the concept of use-value. But rather than
trying to explain that, I'll go straight to Hilferding's
solution to the problem posed by Bohm-Bawerk:

Marx did not actually consider the mechanism by which skilled labour
is reduced to unskilled labour, in *Capital* or any other work.
Nonetheless, Bohm-Bawerk accurately characterises the reasoning
subsequently used and the results reached by Sweezy and Meek, where
they effectively followed the same procedure as Marx employed in
considering the value contribution of the non-labour inputs to
production, when he says that if the labour which went into educating
a workman simply reappeared in the product, then "there could only be
actually five hours of unskilled labour in one hour of skilled
labour, if four hours of preparatory labour went into every hour of
skilled labour".(Sweezy (ed.), _Karl Marx and The Close of his
system_, pp. 84-85.)

Hilferding's reply was that:

"The labor of the technical educator thus transmits, not only *value*
(which manifests itself in the form of a higher wage), but in
addition its own *value-creating power*. The formative labours are
therefore *latent as far as society is concerned*, and do not
manifest themselves until the skilled labour power begins to work.
Its expenditure consequently signifies the expenditure of all the
different unskilled labours which are simultaneously condensed
therein." (p. 145.)

This has been misinterpreted by subsequent authors (e.g., Harvey,
"The Value-creating Capacity of Skilled Labour in Marxian Economics",

*Review of Radical Political Economics*, Volume 17 No. 1/2, 1985, pp.

83-102.) on the basis of the last sentence:

"skilled labor is seen as an expenditure of simple labor to which is
added (1) a proportionate share of the workers own past simple labor
spent learning the skill, and (2) a proportionate share of the direct
and indirect labor of others who contributed to the training
process... In Hilferdings words an expenditure of skilled labor,
`signifies the expenditure of all the different unskilled labor which
are simultaneously condensed therein." (Harvey, pp. 86-87)

This interpretation is understandable, but the real intent of
Hilferding's analysis is contained in the first sentence: he
separates the transmission of value (which adds to the cost,
the wage, of skilled labor) and the transmission of value
creating power (which adds to the productivity, and therefore
the surplus generated by, skilled labor).

To explain how education can increase both the value of skilled labor

and also the value-creating power of that labor--thus enabling an

hour of skilled labor to produce much more value than an hour of

unskilled labor--Hilferding refers to education transferring both

value and use-value to the student. He first hypothetically reduces

the labor of the tutor to "a number of unskilled labors". Then, he

characterizes the value-creating power as the use-value of the

technical educator: training "thus creates on the one hand new value

and transmits on the other to its product its use-value--to be the

source of new value." (p. 145).
"Unskilled labour, if applied to the production of a qualified or

skilled labour power, creates on the one hand the value of this

labour power... but on the other hand ... it creates a new use-value,

... that there is now available a labour power which can create value

with all those potentialities possessed by the unskilled labours

utilized in its formation."

He reiterates this in the next sentence: training "thus creates on

the one hand new value and transmits on the other to its product its

use-value--to be the source of new value."(p. 145)

Hilferding thus argues that education passes on the use-value as well

as the value of the education to the student. The latter increases

the cost of the skilled labourer; the former increases the skilled

labourer's ability to generate value. With this explanation,

Hilferding is comfortably able to conclude that skilled labour is