Thanks for Mike Meeropol's contribution [PEN-L 2359;repeated at end] Personally, I am not opposed to exploring what value theory would look like if there were sources of value other than human labour. This may seem heretical but my reasons are that I think if this is done, we will discover what aspects of Marx's value theory depend on this assumption, and which do not. This is a normal critical, scientific exercise; you do not have to agree with a hypothesis in order to explore its consequences. So my first response would be, someone should try it and see what the equations look like. What I don't much like is circumventing the problem by declining to speak of value at all, when everyone in economics *actually* uses either the concept, or the word itself. I think Mike's question is useful and should be thought about at greater length but my first reaction would be as follows: (i) a simple characterisation of Marx's value theory is that it is objective and linear. Objective, in that the measure of the value realised in any is independent of the parties to the exchange at any given set of prices; linear in that if we represent this value in money (or anything else), twice as much money represents twice as much value. (ii) so far, this characterisation does not introduce the assumption of labour values but does clearly distinguish it from marginal theories of value (but not marginal economics as such, which both Marx and Ricardo used extensively: they merely refrained from deriving the category of value from it) (iii)if you study what neoclassical economics actually does, it operates with a linear objective macroeconomic theory and a nonlinear subjective microeconomic theory. Macroeconomics speaks of price indices and imposes value-added taxes, both of which are also objective and decidedly linear (try halving your value-added tax payments on the grounds that you never really liked it anyhow, or claiming national output has doubled because everyone was *really* happy this year) (iv) thus, the difference between Marx's value theory and conventional macroeconomics is less than supposed, hardly surprising since most macroeconomics was shamelessly plagiarised from Marx to make good the damage done by general equilibrium theory; this does not come out into the open because macroeconomics is completely atheoretical and turns to micro when it wants a theoretical justification. But micro is not the real foundation of what the macroeconomists actually do; it is just a theological story. Oddly enough, neoclassical macro has no microfoundation despite its plaintive claims. (v) what we should be looking at is the following: what are the features of the various objective linear value theories actually in use, since these are the only theories which working economists use in practice? This procedure rules out a lot of useless detours such as neoclassical microeconomics. This isn't meant as a proof: disproofs of utility theory must, I think, rest on the disproof of Say's Law. I am just trying to suggest what is practically useful. (vi)the decisive axiom of Marx's value construction, I think, is explained in the section on the contradictions of the value- form (pp258-269, Penguin/International Edition, Volume I) where the formation of surplus value is discussed. What he says here is that value cannot be created by mere exchange. This is decisive. In effect, once we accept that we can and should make a conceptual distinction between production and exchange, then it seems to me obvious that if one allows new value to appear in exchange, silly results are going to occur. This is a very decisive and acid test of a sensible value-theory. As far as I can see most Post-Keynesian theories fail it, for example. That is why it is very difficult to stop dynamic markup models producing arbitrarily high inflation or deflation. This test also disposes of most theories of fixed capital. It is IMHO the key to a rigorous treatment of depreciation. The subtlety of Marx's point which is often missed is therefore the following: whatever the source of exchange-value, it cannot be exchange. And if, therefore, we divide the sphere of all reproduction into exchange and production, then it can only arise in production. The question then arises, what is production? How does new value arise in production? That, for me, is the real issue. But already by even posing the question this way, a lot of the work has been done. For, what is the difference between production and exchange? One aspect of it is the transformation of one use-value into another. Human production has this in common with natural production. However, there are a few differences. First, human production is *for exchange*. Nature does not produce for exchange. It is indifferent to a tree whether its nuts will be eaten by squirrels or purchased by humans. That is, natural production is not commodity production. To put it another way, the distinction between production and exchange *is* the presence of humans, if one examines the term carefully enough. We can illustrate this by looking at the meaning of automation. Paolo Giussani puts it this way: if I construct a completely automated ice-cream factory with no humans in it at all, what I have is in fact no longer an ice-cream factory but an ice-cream machine. Northern homes are full of such machines. But we don't say, when we switch on the kettle to boil water for coffee, that this is an act of production and charge the household value-added for the activities of the kettle. This is why 'imputed rents' often constitute double-counting, and I completely agree with Anwar Shaikh and Ahmed Tonak in correcting for this. If the kettle is large and expensive then someone can exploit this by sticking a slot-machine on it. But if we study what is going on, we find that really they are only recovering the cost of the machine. They may also attract a rent but only if some abnormal factor prevents kettles being reproduced. Ceteris paribus if they charge above cost someone else will set these kettles up and drive the price down to the cost of kettles. This is not possible if the kettle has an attendant. In this case, competition as is well-known will not drive down the cost of the coffee to the cost of the kettle plus the wages of the attendant, but to a larger amount, possibly modified by the formation of average profit but nevertheless greater than the cost of kettles plus wages. That is, the presence of the human results in *new* value. Only humans do this. Putting the kettle under a tree, even a very obliging tree, has no effect on the price of the coffee. Only if the tree is not reproducible, and attracts monopoly rent, is it possible to circumvent this law: but this is due to an entirely different cause than the tree's capacity to reproduce. On the contrary, it is caused by the tree *not* reproducing. Only if nature stops being natural, does it alter the price of the product. Thus if one wants to dress up rent as the value contribution of nature, one comes to the very odd conclusion that this value contribution is inversely related to the productivity of nature. Gaia must call on Chronos if Value is the progeny. A very strange kind of value contribution indeed: better get rid of all those rainforests quick so we can raise the national product to the skies. Maybe this is what the capitalists are trying to do. I wouldn't like to see this particular social experiment carried through to its conclusion. This has to be modified, interestingly enough, by Marx's distinction between productive and unproductive labour; unproductive labour includes labour which merely produces for direct use, without the intermediary of a third party, a capitalist, who alienates the product and sells it. If a group of people get together and directly hire the attendant as a servant, then the value they receive is equal only to the cost of the kettle, the cost of the energy and the coffee grains, and the wages of the attendant. In this case the coffee of course has value, the sum of the machinery, raw materials and wages, but no new value. The price paid by these people for the coffee does get driven down to the sum of direct costs including wages. This is because the attendant is not producing for a capitalist but directly for use, as a servant, and her/his labour is unproductive. Marx is quite clear about this and I think he is observably right. That's why privatisation makes things more expensive, unless wages are driven down as a result. You have to pay the shareholders too, which you didn't have to do when you were hiring services directly. To put it another way, in unproductive labour humans act much more like agents of nature. Unproductive labour is more natural. I don't like the word 'unproductive labour' for this reason. It is misleading. Really it should be replaced by another term which makes it clear that we are talking about the production of exchange-value, not wealth. The full difference is, therefore, the presence of both the attendant and the capitalist who hires the attendant. In short, *new* value in exchange is created only when human labour is employed to create a use-value which is sold, that is a commodity, that is the specific combination of use-value and exchange-value. Thus: (a) Production as such is the creation of use-values by humans (b) Specifically capitalist production is the creation of use- values by humans for sale. Now, is it possible to reconcile with this the (physiocratic) idea that natural resources are a source of exchange value? I think this is the way to pose it. I tend to feel it is not, but as I say, someone should try it. An alternative question ======================= An alternative question is: why don't robots produce value? Or, as a logical-deductive exercise, how would the properties of robots have to change in order for them to be productive of value? This is a serious question. There is at least conceptually a complete continuum between a slave-robot which mechanically carries out its instructions, and a Blade-Runner android which is indistinguisable from a human. We can at least carry out the thought-experiment of asking, at what point in this continuum does the robot produce new value in the same way as a human? I think this question also indicates the *nature* of the answer: it could not possibly be relate to the physical characteristics of the robot but would have to do with the social relations governing its integration into society. My guess is that the decisive step would be whether the robot was a free wage-earner capable of owning property, in particular whether it was given free disposition over the sale of its own 'labour-power', its productive capabilities. But also important is whether it receives its income (the means to reproduce itself) in the form of money, whether it does in fact reproduce itself or whether it has to be reproduced by humans, etc. I think this is because of an aspect of value which it is easy to forget: it is a disguised social relation. Commodities are not set in a relation of equivalence to each other by something inherent in them, but by the fact that humans consciously conduct their activities so as to uphold this equivalence. In societies where they did not so do (for example where the general rule was that different prices prevailed in every transaction) there was no relation of equivalence and there was no exchange-value. Abstract labour there may have been - I don't want to get into that debate - but value, that is exchange-value, there was not. And in general, value is not a universal social relation but governs only those use-values which behave as general equivalents to other use-values, that is, are exchanged as commodities at a consistent set of prices at any given point in time. To the extent that this is violated (eg with arbitrage between regional markets) the formation of value is incomplete and we are dealing with a transitional or mixed form, as is always the case in real life. Value at root must therefore be the disguised form of a conscious human relation, just like 'authority' or the explicit tithes and taxes in kind characteristic of feudalism. I tend to think that when we enquire into what value is, what we are trying to do is ascertain the conscious human relations which are implicit in establishing, as humans, a society in which our exchanges are regulated by a uniform set of prices. If, therefore, we decided that nature made a contribution to value, we would really be saying that nature was a part of what human society created when it brought about exchange-relation and transformed it into a universal social relation. Already I have a problem with this: precisely what capitalism does is transcend, overcome and substitute for the wealth-creative capacities of nature. It sets humans apart from and separate to Nature. The ultimate capitalism would be one which transformed elementary particles using mass-energy conversion into all the wants of our lives, and then wrapped this up in packets and sold it. Gaia wouldn't even get a look-in. The point about nature is that it is not human or: the point about capitalism is that it is not natural. To be precise, nature is not reproducible by human activity. (the parts of nature which are reproduced by human activity such as agricultural products are precisely and by definition not natural, unless by 'nature' we just mean 'everything') In PEN-L 2359 Mike Meeropol wrote: ============================================================= Value in effect is what modern algebra calls an "equivalence" relation --- with transitivity, reciprocity, etc. --- the specification of that equivalence relation is the term "is worth". If A "is worth" B, then B "is worth A" If A "is worth" B, and B "is worth" C, then A "is worth" C A "is worth" A. The question alan has posed is: Is there something OTHER THAN THAT RELATIONSHIP ITSELF that explains this equivalence relation? The neoclassical paradigm claims it is the result of the interaction of supply and demand --- scarcity interacting with preferences plus incomes. Marx's approach stated that the relationship was the result of HUMAN EFFORT -- both past and present. I still haven't been convinced that he or his followers have made a good enough case for that particular yardstick. the biosphere, the "gaia-given" resources make significant contributions and their abuse changes the type of human effort needed to produce things drastically over the eons! =============================================================
