----- Original Message -----
Sent: Tuesday, September 30, 2003 8:25
PM
Subject: (OPE-L) Re: subjects and objects
in capitalism
An archives reader, Kevin Carson, sent the
following message
and I am forwarding it to you with his
permission. He is in
error in attributing the quote below to me
but I guess it doesn't
really matter who originally wrote it.
How would you answer Kevin?
In solidarity, Jerry
PS: Note the web site address at the end of his
message.
----- Original Message -----
Sent: Tuesday, September 30, 2003 12:07 AM
Subject: Re: (OPE-L) Re: subjects and objects in
capitalism
Mr. Levy,
I just stumbled across this quote from a post of
yours.
What I find strange, not to say eery, in such discussions of the
labour theory of value is that the question, What is valuable about labour?,
is not posed. What does it mean for something to have value, to be
valuable?
It struck me as quite on the
mark, since it coincides with my own line of inquiry over the last year or
so. I've been attempting to rehabilitate the labor theory of value in
the face of the neoclassical/Austrian critique, while incorporating the useful
insights of marginalism.
Your question is very close to one asked by
Bohm-Bawerk in Positive Theory of Capital. He argued that Adam
Smith, in his picture of labor as the basis of value in primitive commodity
exchange, provided no reason why this could be so. The labor theory not
only of Smith, but of Ricardo and Marx, lacked any mechanism or philosophical
basis. This, I think, was a fair criticism; likewise, his criticism of
Marx's attempts to salvage the labor-time standard by reducing complex to
simple labor was justified.
The key to a solution, I think, is Smith's idea
of labor as "toil and trouble," interpreted in the light of Hodgskin's
"voluntary higgling" theory of distribution and Benjamin's challenge
"What is a cost but labor?" Since economics is a science of
human behavior, it stands to reason that any theory of value must be rooted in
human psychology. The labor theory of value, to be salvaged, must be
refounded on a subjective basis; the only alternative is to elevate "value" to
a quasi-metaphysical status. We must abandon a labor theory based on
objective labor-time and replace it with one based on the subjective
disutility experienced by the laborer. The subjective mechanism can be
reduced to an axiomatic understanding of human nature, comparable to the a
priori approach of Mises in his praxeology.
The Austrians themselves have admitted that labor
is "disutility" in a unique way, besides simply involving opportunity costs in
the same sense as other expenditures. Only labor is "travail," involving
a subjective sense of effort. All other forms of "real cost" or
"sacrifice," by comparison, are only relative to the available alternatives in
a given context. Only labor is a real cost in the sense that it must be
compensated for a producer to continue bringing his goods to market.
Equilibrium price, for goods in elastic supply with no market entry barriers,
must be enough to compensate the laborer for his total toil and trouble
involved not only in production but in raising the funds for outlays.
But if it is more, competitors will enter the market until the price falls to
a level just sufficient to cover this disutility. This is rooted
in an a priori assumption of human nature. In the long run, sellers
can only charge for what is a real cost--and again, as Tucker said, "what but
labor is a cost?"
James Buchanan hinted at this psychological
mechanism in describing the reason for labor-time as a basis for exchange of
beaver for deer. On the assumption that "hunters are... rational
utility-maximizing individuals," it makes sense that if it typically takes one
day's time to acquire either a beaver or two deer, but a beaver exchanges for
three deer, no rational person will waste labor hunting deer.
So the rule is that the equilibrium prices of
goods in elastic supply will be proportional to the toil and trouble or
disutility involved in their production, and that deviations from this
price will occur only because of scarcity rents of one kind or another.
The produce of labor will be distributed among laborers, through the
"voluntary higgling of the market," according to their respective feelings of
disutility. Non-labor factors, like capital and land, will have a price
only when the seller is in a monopoly position of controlling access to
them. Without the State's enforcement of banking market entry barriers
and of absentee landlord claims, the interest rate will fall to the labor cost
of administering loans against property, and the price of land will fall to
the labor value of improvements.
One genuine innovation of the Austrians was
Bohm-Bawerk's time preference theory. But as B-B himself admitted, the
steepness of time preference varies a great deal with the distribution of
property and the relative degree of self-sufficiency and security of the
laboring classes. So the present high degree of time preference, among
laborers, is largely a historical result of primitive accumulation. As
for the residuum of time preference that would exist in an egalitarian market
society, Maurice Dobb has argued that time-preference can be adequately
explained as a scarcity rent of present labor vs. future labor.
Sorry for the long rant. I'm in the process
of organizing the results of 16 months' intensive reading, and your post
struck a chord.
Best,
Kevin