[OPE-L:1979] Re: Re: Re: Value Form (OPE-L 1972)

Steve Keen (s.keen@uws.edu.au)
Sun, 26 Dec 1999 21:50:31 +1100

This issue of the reduction of skilled labor to unskilled was solved by
Hilferding--though very few if any Marxists seem to have noticed this.

His solution was a brilliant application of the concept of a dialectic
between use-value and exchange-value/value (I use the double form here
because Marx generally operated as if the latter two were equivalent,
though as discussed earlier, at a finer level of semantics, ev is the form
and v the substance)--possibly the best application of it outside Marx's
own proof of the source of surplus value.

Hilferding was replying to Bohm-Bawerk's critique of Capital, in which
inter alia, BB criticised what he perceived Marx's method of reducing
skilled labor to multiples of unskilled labor.

Marx never actually provided any mechanism, but BB presumed this was that
the labor-time involved in acquiring skill was reamortised in the
productivity of the skilled laborer.

Bohm-Bawerk quotes Grabski as saying that "`an hour of skilled labor
contains several hours of unskilled labor.'" However, Bohm-Bawerk argues
that if the labor which went into educating a workman simply reappeared in
the product, then "there could only be actually five hours of unskilled
labor in one hour of skilled
labor, if four hours of preparatory labor went into every hour of skilled
labor" (Bohm-Bawerk 1896, pp. 84-85). Thus, according to Bohm-Bawerk's
interpretation of Marx's reasoning, the ratio of skilled labor to unskilled
labor would in practice be at most of the order of two, and not, as Marx
muses, of the order of six
(Marx 1867, p. 192).

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." (ibid., p. 145).

The main relevant cites on this are:

"The labour 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*."(pp. 144-45.)

"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."

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, both
quotes. The comment about unskilled labor generating skilled is a result of
Hilferding first reducing the input from the educator to a multiple of
unskilled labor).

Hilferding thus gives the use-value a specifically economic role as the
motivation for training labor in the first place--to increase its
value-creating capacity. He also completely separates the quantitative
valuation of this use-value from the cost of training, its exchange-value.
This analysis thus allows education to be an additional source of surplus
value. Hilferding is thus comfortably able to conclude that skilled labor
is worth multiples of unskilled labor in value creation terms.

Using Hilferding's method, the training inputs will determine the wage paid
to skilled labor, but the additional productivity of the skilled
laborer--the use-value of the education imparted--is independent of the
cost of education, and the "value-creating power" of education can only be
determined ex-post. Skilled labor can therefore add much more value than
the education cost--which as Hilferding points out means that education can
be a source of additional surplus value.

Bohm-Bawerk, E., 1896. Karl Marx and the Close of His System, Sweezy, P.
(ed.), 1949, Orion, New York
Harvey, P., 1985. "The Value-creating Capacity of Skilled Labor in Marxian
Economics", Review of Radical Political Economics, Volume 17 No. 1/2, pp.
Hilferding, R., 1904. "Bohm-Bawerk's Criticism of Marx", in Sweezy, P.
(ed.), 1949, Karl Marx and the Close of His System, Orion, New York.
Keen, S., 1993, "The Misinterpretation of Marx's Theory of Value", Journal
of the History of Economic Thought, 15 (2), Fall, pp. 282-300.

At 12:27 1999-12-24 -0500, you wrote:
>I am on my way out of town for ten days, but I want to try write a quick
>reply to John's comments and questions in (1974) (thanks, John). We can
>discuss further when I return.
>1. As I understand it, Marx assumed that skilled labor is some multiple
>of simple labor, as did Ricardo before him (with many different kinds of
>skilled labor and hence many different multiples). Marx did not explain
>how these multiples or "reduction coefficients" are determined. Instead,
>he just took them as given, again as did Ricardo. In the Critique (p.
>31), Marx said: "The laws governing this reduction do not concern us
>2. In the passage from vol. 1 of Capital that John quotes, Marx does not
>say that these reduction coefficients are determined by market exchange.
>Rather, he says that the market exchange of commodities as equivalents is
>evidence that this reduction is made in some way. The reduction
>coefficients are MANIFESTED in market exchange, but they are NOT
>DETERMINED by market exchange. Remember that this passage is in the
>context of a general discussion of "the nature of value INDEPENDENTLY OF
>ITS FORM OF APPEARANCE" (p. 128, Vintage edition) (with a return to the
>"form of appearance of value" in Section 3).
>3. Marx briefly returned to the issue of skilled labor in presenting his
>theory of surplus-value in Chapter 7. Recall that in this chapter (Sec.
>2), Marx first calculates the quantity of abstract labor, in units of
>labor-hours, required as a social average to produce first 10 lbs. of yarn
>(30 hrs.) and then 20 lbs. of yarn (60 hrs.). All this is independent of
>prices. Then assuming that the money-value-added per labor-hour is 0.5
>shillings, Marx determines the price of each of these two quantities of
>yarn as the product of the number of labor-hours and the money-value-added
>per labor-hour (i.e. P = mL).
>Marx mentioned early in this section that he is assuming, for the sake of
>simplicity, that spinning labor is simple labor (p. 296). He adds:
>"Later it will be seen that the contrary assumption would make no
>Then labor in this section, he returns to this point (pp. 304-06). Here
>Marx says"
> Whatever the difference in skill there may be between the labor of
> a spinner and the labor of a jeweler, the portion of his labor by
> which the jeweler merely replaces the value of his own labor-power
> does not in any way differ in quality from the additional portion
> by which he creates surplus-value. In both cases, the surplus-
> value results only from a quantitative excess of labor, from a
> lengthening of one and the same labor process: in the one case,
> the proces of making jewels, in the other, the process of making
> yarn.
>In other words, no matter what the reduction coefficients of skilled labor
>to simple labor are, skilled labor produces surplus-value in the same way
>as simple labor: by a quantitative extension of the working day beyond
>necessary labor (i.e. S = m ( Lc - Ln)).
>I know there is much more to discuss here and I look forward to continuing
>the discussion when I return.
>Happy holidays everybody and happy new millennium!
>May it be a socialist millenium!
Dr. Steve Keen
Senior Lecturer
Economics & Finance
University of Western Sydney Macarthur
Building 11 Room 30,
Goldsmith Avenue, Campbelltown
PO Box 555 Campbelltown NSW 2560
s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
Home 02 9558-8018 Mobile 0409 716 088
Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
Workshop on Economic Dynamcs: http://bus.macarthur.uws.edu.au/WED

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