[OPE-L:2025] Re: A possible paradox in the theory of value

[Gil Skillman <gskillman@xxxxxxxxxxxxxxxxx>]

Paul writes:

>I have thought of a possible paradox in value theory.
>
>Let us assume
>1. That the value of a product is the aliquot share of the
>   total social labour time required to reproduce it.
>2. That labour power requires inputs to reproduce it.
>3. That the inputs required to reproduce different concrete
>   labours differ.
>
>Thus to produce 10,000 hip replacement operations over a year would require
>the labour time of operating staffs plus the labour time allocated to
>reproducing these people as surgical teams. The reproduction of the surgical
>team would include obviously their food and clothing plus the time that
>society has to allocate to training sufficient nurses and doctors to
>replace those who retire or leave the profession over the year.
>
>Suppose that each operation requires 100hours of direct labour, and
>that a total national staff of 1000 people work for 1 million hours directly
>on these operations. They consume goods worth 500K hours, and
>society has to allocate a further 400K hours to keep up the training
>levels of the teams. Assume that the materials used up amount to 100K hours.
>
>Thus to reproduce 10,000 hip operations per year requires
>2million hours of labour, and the value of each operation is
>thus 200hours.
>
>The paradox here is that the share of the social labour required
>to produce the 10,000 hip operations is 2 million hours, whereas the
>standard method of calculation used by Marx would make it 1.1 million
>hours ( the million hours of direct labour plus the 100k of indirect
>labour in the titanium hip joints.)
>
>The implication is that if we define the value of a product to be
>the share of total social labour required to reproduce it, then we
>have to include the wage as labour time that is passed on in just the
>same way as marx treats raw material inputs. This is a paradox
>given the standard interpretation.
>
>In this scheme of accounting all direct labour constitutes the surplus
>value, wages are no longer accounted for as being paid out of current
>direct labour.
>
>In this accounting scheme there is no problem of defining skilled
>labour multipliers, all direct labour counts as simple labour. One
>can obviously model it for an economy of n products and m concrete
>labours by a (n+m) square matrix of technical reproduction coeficeints
>for both labour and products. There would be the usual L vector of
>direct labour inputs, but the first (n) elments of the L vector would
>be null.
>
>Can fellow list members see an error in this paradox.

Paul, I just got back into town and read your post.  My response is that so
far as I can tell the condition you describe creates absolutely no paradox
in value theory itself, although it does raise some very serious issues
about a number of issues that Marxian value theory concerns itself with,
including the relationship between values and prices, the nature of
exploitation, and the implications of "the general law of capital
accumulation" for wage levels.  A corollary of this response is that wages
are no more used in the calculation of values in your scenario than the
prices of raw materials or machines are used in determining values in the
traditional scenario.

1.  According to Marx, the value of a commodity is measured by the labor
time socially necessary to produce it.  His discussion of this notion makes
clear that socially necessary labor time (SNLT) includes both new labor
directly expended in production and indirect labor expended in producing
the intermediate goods used in producing the commodities in question.
Notice that no reference is made in this formulation to the price of any
commodity.

2.  Your scenario introduces a fact that is typically ignored in
value-theoretic formulations, namely that labor skills are intermediate
goods that are themselves produced by labor.  Thus the labor time necessary
to produce these skills must be included in the calculation of values for
the commodities produced by workers using these skills.  However, this
introduces no substantive or methodological issues (regarding, say,
depreciation or input fixity) that aren't already present in the analysis
of physical capital.  For their part, neoclassicists recognize this
parallelism with the term "human capital."  I think it would be salutary if
Marxists recognized that there is absolutely no *essential* difference
between "human capital" and what they call "labor power."  They're treated
very differently, of course, but not perhaps for legitimate reasons, as
your scenario begins to illustrate.

3.  Contrary to your suggestion, it does not follow from the above that we
have to "include the wage as labour time that is passed on in just the same
way as Marx treats raw material inputs."  For one thing, at least as far as
I can tell Marx didn't argue that the contribution of used-up raw materials
to value should be measured by their prices, so the suggested parallel is
false.  Second, there is no need to refer to wages--one instead calculates
the labor embodied in the production of specific skills (teachers,
classroom buildings, etc.).  I reiterate that while this introduces
complications, the latter are not of a sort different from that encountered
in the value-theoretic treatment of physical capital.  What you have here
is a specific version of production with heterogeneous capital goods.
Complex yes, but neither novel nor paradoxical.

4.  I agree with you that there is no need to introduce "skill multipliers"
in the measurement of socially necessary labor time.  An hour of
productively necessary labor is an hour of productively necessary labor
whatever its skill content.  Thus the only intrinsic analytical
complication introduced by consideration of skill is the one discussed above.

5.  None of this is to suggest that the introduction of labor skill into
value analysis doesn't create potential difficulties for the traditional
Marxian analysis of capitalism.  Quite the contrary.   The common basis of
the difficulties introduced is that, along one dimension at least, labor
power takes on the aspect of capital:  it can be accumulated (i.e. one can
get more and more skills), it can earn a rate of return corresponding to
the level of accumulation, and the rate of return *need not* be dictated
solely by the labor time required to produce the extra labor skill.  That
is, "human capitalists" may enjoy some of the advantages that "capitalists"
enjoy, and for the same economic reasons.  Some implications:  wage rates
need not equilibrate across sectors, or even tend in that direction; wages
need not trend toward subsistence levels; and highly skilled workers might
legitimately and consistently be understood to exploit other workers, and
possibly even capitalists.

N.B.:  Step 5 should *not* be taken as an indication that I endorse human
capital theory as the primary basis for explaining wage levels in
capitalist economies.  I tend to favor some version of market segmentation
theory myself.  But human capital considerations play some role, and
moreover *a consistent Marxian account of skill differentials would have to
acknowledge this role* in one form or another.

For what it's worth.  Gil