There is a recent currently fashionable idea that Marx did not put forward a labour theory of value. I am surprised at how often I have come accross this view over the last 20 years or so. Up until late 20th century, say until the fall of the USSR, economists whether bourgeois or communist were in agreement that Marx had a labour theory of value.
Now, whilst the orthodox economists still agree that Marx had a labour theory of value, a section of left wing economists want to claim that he did not. Given that the empirical evidence for a labour theory of value is very strong, this insistence that Marx had a different theory is rather strange. Why would you want to claim that Marx was not a supporter of what we know to be a testable and correct scientific theory?
This came up in a discussion consequent upon my posting of a series of articles criticising the Hegelian interpretation of Marx. One of my reservations about the Hegelian school is that I think a Hegelian approach does not ecourage empirical investigation. Instead it leads people to focus on interpreting existing texts and operating at the level of abstract ideas. The scientific process whereby theories are tested against evidence and then developed to get a better understanding of what can be observed tends to be cast by the wayside.
RV argued that although the labour theory of value, in the sense of prices being determined by labour content, was not held by Marx, and was not one of his basic assumptions, a dialectical and synthetic understanding of what Marx wrote could nonetheless lead to scientifically testable propositions.
But I did not say anything about that. What I did say is that it is simply NOT a basic assumption of Marx that commodities generally *exchange* at their value or that, as you say “the price of commodities is determined by embodied labour” (except in a very mediated way). Neither is it a basic assumption of Marx that “the value that capitalists *get* on sale depends on the labour extracted from the workers they employ” (unless you mean by “capitalists” the capitalist class as a whole rather than each individual capitalist). In fact, Marx explicitly contradicts the former in Capital, Vol. I right at the begining of his analysis of exploitation (in the last footnote of Chapter 5) and the better part of Capital, Vol. III is Marx contradicting the latter.
Since those are not basic assumptions of Marx’s theory, falsifying these assumptions does not falsify Marx’s theory. That’s plain and simple regular scientific procedure for you.
However, what *can* be tested is the result Marx obtains from his analysis and synthesis. For example, that when the growth rate of capital outweighs the growth rate of employment (in terms of hours worked), ceteris paribus, the aggregate price level tends to fall and this tends to decrease the aggregate rate of profit (a hypothesis that should be slightly elaborated to take into account inflation).
Whilst there are in the first sections of Capital, Contribution to the Critique of Political Economy, and Wages Prices and Profit clear statements to the effect that labour is the source of value and that prices are determined by labour content, I know of no passage that asserts what RV claims in his last paragraph. There is also clear empirical evidence of a strong correlation between prices and labour content, but I know of no papers showing empirically that the price level falls when the growth rate of capital exceeds the growth rate of employment.
Suppose we drop the point about price levels falling and just retain the argument that if the accumulation of capital is faster than the growth of employment, then the profit rate will fall. Well there is evidence for that certainly. But this is a very distantly derived result of Marx. It can be derived from the labour theory of value – in the simple sense in which commodity price is strongly correlated with and determined by labour content – but it can also be derived from neo-classical analysis. Solow, for example was able to derive this from the neo-classical production function. As a basis for asserting the scientific status of Marxist theory it is weak, since this observation is not distinguishable from what orthodox economics says.
When we say that prices are determined by labour values, what does this mean?
At the minimum it means that changes in the labour required to produce commodities produce corresponding changes in the money value of the commodity. But this a derived consequence of money values being proportional to labour content. One can allow an element of noise, a percentage error induced by temporary fluctuations of supply or demand whilst still accepting that the attractor for relative money values (prices) is relative labour values. In modern language, not available to Marx, we would say that labour content is strongly correlated with sale value in terms of money.
This assumption is absolutely necessary for the marxist analysis of absolute and relative surplus value.
Recall that Marx calls absolute surplus value, that surplus value produced by lengthening the working day. In his analysis of this he assumes that a proportional increase in the working day – say by 1/4 from 8 hours to 10 hours will result in a proportional proportional increase in the value added by labour during the day. He repeatedly switches between presentation in terms of money and equivalent proportional representations in terms of time.
The same proportionality is involved in his discussion of the limitation of the working day.
If it were not the case that value added was proportional to labour time, this whole argument would be groundless. Were value added not proportional to labour time, were it proportional to the fixed capital employed, for example, then there would be no relationship between the length of the working day and the surplus value going to the employer. If you drop the assumption of proportionality of value added to labour time worked, then the whole analysis he gives falls appart.
Now look at relative surplus value. It is termed relative because it is produced when the relative proportions of value added going in wages and surplus change, the working day remaining constant. He says that the wage is equal to the money value of the necessities required to reproduce labour power under given cultural conditions of life. If the use of machinery reduces the labour required to make these necessities then there is a proportionate fall in their money value and, as a result, the share of surplus value rises since the labour force can now be reproduced with fewer hours of necessary labour. If necessary labour falls, surplus labour and surplus value rise.
Where the absolute surplus value analysis rests on a proportionality between labour time and the value added to the product. Relative surplus value rests on a proportionality between labour time and the money wage, via the mediation of the price of wage goods.
The detailed analysis of how machine weaving replaced hand loom weaving is based on the same assumption. The reduction in the time taken to produce a yard of cloth with machinery reduced its money value and in consequence forced the handloom weavers into penury. The same assumption comes up again and again – proportionality between socially necessary labour time and money value of commodities.
If RV thinks that this proportionality is not a foundational assumption of the analysis of absolute and relative surplus value, let us see him reconstruct the analysis without at any point being able to make that assumption.
If he can do that, then try reproducing the critique of Ricardo’s quantity theory of the value of money in Contribution to a Critique of Political Economy without the assumption that Marx makes there that the value of a commodity in terms of gold ( its price ) is determined by the relative labour content of gold and the commodity in question.
Paul, although it might be a big topic for discussion, some “critics” are raising an argument against LTV the fact that, as Marx suggests, machines do not create value, only transfer their value. And they claim that this is not true. I was thinking if there can be a counterargument against it by means of thermodynamics even – that is, a machine cannot produce more energy that it is used to sustain it. Are you aware of the critique and/or any relevant insight?
Thanks
The strike is a social experiment that conclusively demonstrates that labour, not machines, create value.
The mirror image of this experiment, switching the machines off , also produce the same effect, those strikers are indeed replaceable by other types of machines.
A driverless vehicle produces the same economic result as a vehicle with a driver , the value is .. shall we say .. invariant to labor ..
Strikes are better to study conflict and survival of the fittest type of evolutionary theories, which indeed are a fundamental drive in all economics and history at large.
From thermodynamics viewpoint the work done, entropy changes and energy transformations used in any non-creative activity such as repetitive manual labor, either by a machine, a horse or a human are indistinguishable.
Thought experiment, which can be realised in practice:
Put a few slaves, some horses, a robot or any other machine inside a box in such a way that they all are capable to power the mechanism to produce something at the same unit cost.
This is practically possible to design by using the proper number of slaves to make their costs and output equivalent to the horses or the machines.
The owner of the box can not tell what is powering the box internal mechanism at any given point in time. All the owner knows is how much X costs are needed to produce Y output.
There is absolutely nothing special or unique about human labor that could be used to tell when the slaves are the motive power vs the horses vs the machines.
The owner would be quite happy to use horses instead of human labor to increase his profits if their unit cost is less than the cost using human labor. From the owner ppoint of view worker is nothing but another type of equipment.
Lets call this the black box LTV experiment.
Value isn’t a physical property, even if it might be useful to treat it as if it was for some purposes. It’s a social property, I guess you could say an emergent property of a capitalist economy — because it is possible to systematically pay workers less than the value they produce,
For this reason you can’t simply carry out an experiment
Your black box experiment assumes that the causal powers of human labour and machines are identical. So you’ve baked your (faulty) conclusion into a (faulty) premise.
But the casual powers of human labour are very different to machines. For example, we build the machines, machines do not build us; we change our techniques of production, whereas machines are the techniques of production; we adapt our behaviour to achieve new goals whereas machines have fixed goals etc.
Put human labour into your black box, and soon it will produce the same output for less unit cost, creating profit. Why? Because humans are endlessly inventive and creative — they learn by doing. Horses and machines don’t have this power.
Every machine was once created by human labour, typically to reduce unit costs. The cause of new economic value is always labour, and nothing else.
Capitalist ideology, however, is reasonably successful at portraying human labour as just another kind of input. The capitalist class must deny that labour is the cause of profit in order to justify its appropriation. Don’t fall for it!
Thermodynamics has nothing to do with ideologies, causal powers, the order or who or what created the machines, etc.
Thermodynamics like all scientific facts are not subject to “interpretations” , either it is correct or not, experiments validate.
My conclusions are based on testable experiments and thermodynamic arguments, not speculative premises as used in the LTV.
I agree with you and logic 101 that if the premises are false, then all the inferences are trash .. that is the problem with LTV .. human power is not special at all.
Human labor is just work, plain an simple, like any other machine is subject to the same thermodynamic natural laws.
New economic value is also created by non-human machines, horses, chemical reactors, robots, and anything else that is used to transform inputs into something with economic value. A fully automated assembly plant today has almost no workers but creates the same vehicles as before, all the painters and welders are gone, yet the new vehicles are new and do have value. All these workers has been replaced by robots.. machines.
Yes human are creative, so what, it does not changes the thermodynamic argument, and I stated non-creative work to make the comparison obvious, mechanical repetitive work as used in manual labor, the type Marx was most concerned about.
Capitalism might be exploitative but not due to LTV. It is exploitative when workers are given less than what they created, like slaves in the past where the exploitation was overt and obvious because most of the work was mainly done by manual labor and there was no other source of machine value.
The “premise” in LTV that only human work creates value is false.. and so most of its conclusions.
Any transformative work can creates value, machines and people are just different types of machines, and can replace each other.
Are prices positively correlated with labor time ? ,, Yes , it is a main cost .. it is also correlated in the same way with the time the machine the worker was using was active..
How much value is created by the machines and how much by the worker (biological machine) is what needs to be determined scientifically to quantify exploitation.
I am not falling for any ideology, Capitalist or otherwise. I dislike Capitalism even if someone proves it is the best economic system ever possible because it is intrinsically grounded in selfishness, work alienation, and oppressive social relations, which is totally the opposite of the “freedom loving” arguments spouse by its apologists.
@Kumba
Can you give us an example of a factory that is fully automated? Also, can you give us an example of an industry where all competing actors have their assembly lines fully automated? You have responded three times now yet your responses added almost nothing of value : )
The special thing about human labor is that it can be abstracted. That it is in the end joules, that is trivial. You don’t add anything. But from the point of view of its social character, it can be abstracted. The work of a machine cannot – the machine is created for a particular reason when needed to replace human labor. My question was about the limiting case where in an industry-wide level, machines can operate without human input(that is absurd ofc because it violates the law). What value would a “natural” factory add? What economic value does an orange tree adds when oranges grow out of it due to its natural circle? How would cost/profit be defined in this regard?
“Are prices positively correlated with labor time ? ,, Yes , it is a main cost .. it is also correlated in the same way with the time the machine the worker was using was active..”
Do you have any sources for this claim? That prices correlate with labor time is established.
This might pop up twice because I accidently hit the “post” button before I was finished.
Value isn’t a physical property, though it might be useful for some analytical purposes to act as though it is. Value is a social property, or an emergent property of a capitalist economy.
Labour is the source of value because (overall, in general) workers can be systematically paid less than the value they produce, whereas anything bought from a capitalist will (on average, in general, etc) be at around
Kumba Kiri displays a total lack of understanding of the concept of value, backed by a sham thought experiment that fails to act as even a fig leaf to cover the inanity of the theory put forward.
The reason only human labor creates value, as opposed to use-value which indeed nature or machines are fully capable of creating in addition to humans, is because value is a social relation among humans. It is the means by which the division of labor is organized under market economies (social production through individual exchanges). The fundamental preconditions for this system is the formal (moral, legal) equality of productive subjects and the presence of competition (i.e. an actual market).
The laughable thought experiment set up by Kumba Kiri violates both assumptions. There is no competition whatsoever, just one box as devoid of competition as is the mind of Kumba Kiris is of critical faculties, and the horses, machines and slaves (yes, slaves! not free workers!) which are defined to be functionally defined to be non-human from the get go. Thermodynamically cringeworthy.
The orange juice and bananas experiment:
Do you like orange juice and/or bananas ?
I do like both and consume some every morning for breakfast, they certainly have economic value and everybody that wants them must pay for them.
In the past someone came down from the tree were they lived and tinkering around discovered that oranges and bananas tasted very good and decided to offer them to their fellow tribesmen; but for a price!
So he told them these valuable commodities must have cost a lot of labor and ingenuity, because only human labor und man made means of production creates economic value their guru had declared.. and it was known someone was burnt alive before for disagreeing with the guru ..
When pressed to disclose his technology he confessed it was a self-assembled chemical realtor of unknown mechanism designed by very smart fellows.
They all agreed it was very ingenious technology and decided to call the chemical reactors “Wild Orange and Banana trees”.
Eventually someone spying the reactors for a long time realised that there was no labor or ingenuity involved but the oranges and bananas still tasted good and cost plenty .. uhmmm .. how to attach a price then ? .. they should have no value ..
This fairy tale is older than the water wheel fairy tale , if anyone likes fairy tales let me know to publish it, it is also about thermodynamics but with some labor attached.
Saigon
The machines are operating the same amount of time a laborer is using it.
Does not it follow the labor time and machine time correlate ? .
Then one can say that the relationship between machine time operation and joules is an affine one. I am sure I heard Paul saying that prices and energy do not correlate.
Saigon
The machine time is the same as the labor time, or not ? .. Correlation nearly 1 , or not ? ..
und if A correlates with B and B correlates with C , then …
We are talking correlation of labor time to prices .. but also correlation of machine time to rpices ..
This part of the argument is purely statistical. No thermodynamics here .
Energy is a common input to all work in the Universe . It “cost” energy to produce anything .. It must be reflected in the prices when its content is significant as labor in a factory.
Picasso spent a labor day on a painting and its paintings are sold for more than a factory .. not a commodity but shows prices can be anything a fool agrees to pay ..
Speculation about trees and machines in the abstract is all very well, but to test theories you need evidence. The various national input output tables are there for people to use. They can be used to compute the x content of output where x is labour, coal, electricity, steel or whatever. You can then see for yourselves which content best predicts the eventual market value of the industrial sectors outputs.
Trees are literally chemical reactors, machines, they transform input into economic value without any human intervention, this is a hard scientific fact, it proves that machines by themselves can create value.
Thermo-chemistry is par excellence thermodynamics .. nothing speculative here .. proven Science , ask any thermodynamic expert.
I agree that these ideas as applied to economic problems should be validated against available data, as any other theory, but note that because the machine time is the same as the labor time whatever you say for one is automatically the same for the other .. so all your statistical studies apply to machine time too .. it is the same time , same numbers ..
“Perhaps” it feels like speculations because it is unfamiliar and a difficult subject .. but it is sound thermodynamics .. ask any expert in that and I will debate him too , there is NO room for interpretations and speculations as thermodynamics is one of the few “hard science” areas where all physicists agree (even Quantum mechanics and the Theory of General Relativity are sometimes incompatible and physicists do interpretations and sometimes disagree .. but not in thermodynamics)
I would appreciate the real experts in LTV explain how and why Marx decided that only human labor produces value. If this is a correct scientific statement then we all must agree..and I will be the first one to be happy Marx is correct, but so far I believe he assumed something wrong and thermodynamics show he was wrong.
Please prove me wrong , I will be glad to be wrong.
There is a lot of mumbo-jumbo written here by other people which I will not reply to .. it is meaningless crackpottery, ..just a little detail .. if it not testable it is not science..
Why does labour not steel or rubber provide the basis for value, why human labour not the labour of horses?
It is because human labour not only enters into every branch of production, it enters preponderently into every branch of production. It does this because of the polymorphic character of human effort. The only input that enters as commonly into production now, into all branches, is computer services. But for all industries this is a very minor cost compared to labour costs, in consequence the vertically integrated labour cost is overwhelmingly the dominant determinant of an industry’s value of output.
Trees literally do not create economic value. They literally create leaves, wood and flowers and as a by-product oxygen. Economic value is value according to humans, as only humans have economies. Trees don’t. The reason human labour is the foundation of all value, is that human labour is the only thing common to human production, which is production done by humans. If humans plant trees into orchards, and grow apples from them, then the value of the apples, is the cost to the humans of growing them, not the cost to the trees. As trees don’t have economic value, and so don’t know costs, but humans do.
But people can own oranges and bananas, oranges and bananas can’t own people. Value is a property relation, I own it, you don’t own it, so only people can create value as value is a relation between people.
We’re not talking about Picasso’s labour here, commodities have to be reproducible for the labour theory of value to apply. Maybe a print of Picasso’s labour. The production process precludes physical constants, inputs and necessarily different from outputs. As there are no physical constants, so production cannot be measured physically.
@Kumba
You keep regurgitating words from physical science without adding anything of substance. Scientism, it seems, is your passion. Science, your ideology. Paul has published data on labor time vs price correlation (yeah, correlation doesn’t imply causation). Do you have data on what you suggested? Do you have data on machine time/energy vs price? I remember Paul saying they don’t correlate, but if you have data, I am all eyes. Until then, no more talk about “thermochemistry” and “quantum mechanics”.
Saigon
You ust be mentally retarded or uneducated as a child can comprehend that if the time labor and machine labor are the same then whatever Paul did for labor time is the same for machine time .. they are the SAME NUMBERS .. all his results are the SAME for BOTH.
Please stop pestering me
No they turn out to be very different numbers because you have to track the usage of input x whatever it is back through multiple generations of prodution. In each industry the usage of inputs x and y and z will differ so that you end up with different valuations of each industry’s output depending on the value basis you use.
We were then assuming and taking about different things.
It is not “just” correlating labor times to prices but something else .. why someting else ? .. were is the definition of what is being correlated ?
I want to pinpoint the usgae of terminology in Marxian Eonomics as it appears Economists use the same terminology to define concepts like value in different ways.
Please explain what is correct or incorrect with these items:
1) An orange tree produces a commodity with economic value
(It can be used or it can be exchanged)
2)The tree produces the valuable commodity without human intervention, therefore it shows human labor is not needed to create value
And to stop wasting time and prove if Marx was correct or wrong, please define unambigously like a Mathematician what he did to assume only human labor creates value.
If this was defined without fuzziness then other Economists could not disagree with it as most of them do. If you can not prove them wrong then there is a problem with it and it becomes speculation.
Mumbo-Jumbo is not Science.
You economic value conflates use value and exchange value or price. If an apple grows on a tree and someone passing by plucks if from the branch and eats it, then it has a use value, but not a price. It cost nothing. If however, you have an orchard of apples trees, they too grow their apples but now their is a cost. Humans have to select the best varieties, transplant them onto the root stock, plant them in in straight lines, spray them to keep off bugs, gather them in when they are ripe, put them in a refrigiated lorry and transport them to the market. Now they have a use value and an exchange value or price, what’s so difficult to understand?
The wild tree oranges will have a price and value when it is offered to other people for sale. The price does not “necessitate” HUMAN LABOR to appear later .
mathematical “Necessitiy” and “sufficiency” is what we need to prove or disprove Marx. Not fancy rethorics
I asked directly Dr. Paul Cockshott, expert marxist Economist and Computer Scientist (Applied Mathematician) to MATHEMATICALLY define the terms and THEN we will derive the logical conclusion.
billjefferies Please stop writing to me mathematically undefinable crap. That is not science but cultist behaviour.
Is rudeness a mathematical quantity? Abuse me in algebra. I look forward to seeing it. If the product of wild orange trees is offered for sale, then it is no longer wild, it has been harvested. Anyway what proportion of orange production is from wild trees? That is a mathematical quantity. It is nil. The labour theory of value is concerned with outpout that is produced, not wild, and so the premise of your argument falls, mathematically and otherwise.
Kumba conflates wealth with value probably. Wasn’t it in his critique of the Gotha program that he criticized the socialists of saying that “labor is the source of all wealth”? Adding ofc that the Land is also a source of wealth.
The value can be determined “mathematically” mr.Kumba and is “the socially necessary labor time” required for the production of commodities. But that again has preconditions. You seem on your way to discover the fallacious attempt to repudiate the value theory by asking “what is the value of a mudpie”.
I pondered some more about these issues to get a more clear picture, below is what was logically plausible. what actually happen in the real World is contingent on zillions of interaction between groups of people and between the people and the natural constrains.
Sorry but Marx was mistaken, he assumed the only source of wealth, value and prices is human labor, this is not logically tenable when tested against thermodynamic science.
Here is one example that shows workers might not even be exploited but overpaid if we use only their labor as a yardstick to measure wealth-value creation:
A group of workers build a waterwheel using L hours of labor, the waterwheel therefore “stores” or can “transfer” at most L hours of labor to other transformations.
Regardless of the exact number L is finite and comparatively insignificant to the amount of wealth-value the waterwheel will create as it will function essentially forever while the river is flowing, perhaps millions of years.
That is what the Capitalists have figured out and why they become richer and richer, they keep for themselves all the wealth created beyond L, and perhaps some more if the workers are exploited and given less than L. The important issue is “why” they are allowed to own and legally keep the “means of production” for themselves. The “ownership” of anything is an arbitrary social arrangement and so Capitalist “owners” can and have been expropriated of these arbitrary “rights”.
Machines like the waterwheel and more so the mechanical machines created since the Industrial Revolution can generate far far more wealth than what was put into them as labor, they are just organising (reducing entropy) the existing natural energy which is for practical purposes infinite (The Earth will disappear vaporised by the Sun eventually, the energy source will outlast everything).
But not only machines like the waterwheel produce more than what was invested in labor into them, that might not be enough for a wealthier society, it is also necessary that the wealth creation occur faster than we consume it, animal traction was too slow, and the waterwheels might be too slow since human do not control the speed at which they operate and at most can create multiple machines, but the mechanical machines can produce way faster and the wealth accumulates at an even faster and faster rate as machine improve their efficiencies .. this is why we are so rich today vs before the Industrial Revolution.
The issue of “wealth distribution” is orthogonal to “wealth creation” in all societies, the distribution is an arbitrary repartition between democratic consensus or brutal slavery allowing some to keep most of the wealth. An slave society could distribute all the output equally if they wished to do so and a centralised planned socialist society could in principle give the worker the least possible and use most of the output for the elite or weapons or whatever.
The level of technological advancement is not tie to the social arrangement using whatever is available for production, these are also orthogonal.
It is possible to create a super advanced developed economy with a slave social framework or a very poor society of any technological level set up in a communitarian communist way.
What is common to all production is the total energy cost, not only human labor. Human as just biological machines powered by chemical reactions, not different than a horse.
The “creative” ability and ingenuity to invent and design the machines is what allows humans to reduce the natural entropy and channel natural energies into wealth creation, this might take very little labor per se but it is what in the end allows the wealth accumulation. If any one should be given credit for wealth creation are the “inventors” , everybody else just provides a bit of energy to the productive process and can even be replaced by a mechanical machine eventually as it is happening now in many factories.
The whole economy can be run in a distributed way managed by the “market” (feedback loops with constrains) or overall centrally planned. This is also orthogonal to the social arrangement in the society. Combinations of these “management” strategies are possible and probably more efficient than everything done in only one way.
If a centrally planned economy is planned based only on human labor, most of the wealth created will be unaccounted for .. Marx erroneously postulated human labor creates all but this is mistaken.
There’s nothing new in the world “In order to demonstrate the general character of this form of ground-rent, let us assume that most of the factories of a certain country derive their power from steam-engines, while a smaller number derive it from natural waterfalls…” https://www.marxists.org/archive/marx/works/1894-c3/ch38.htm
Billjefferies , my apologie to you for being rude.
I am impacient and have a very short fuse and bad temper .. my fault not yours.
Please forgive me.
But you and Marx are mistaken
I quickly read the article and took a first impression, I will read it slowly and carefully when I find the opportunity. Perhaps I misread a bit of it due to Economics jargon which I am not used to since never studied Economics before.
The whole article is very interesting, most arguments are the same using thermodynamics except when the “human labor” is given magical properties.
But it is possible to recast almost exactly the same arguments using energy in general, and machine efficiency instead of increased labor productivity, the organisational issues are entropic efficiencies gained. Almost every line can be read in parallel using thermodynamic arguments.
The general concept of differential rent argument is exactly the same using thermodynamics.
Landownership enables the landowner to appropriate the difference between the individual profit and average profit .
Yes indeed , ownership of waterwheel land is a monopoly that allows the land owner to force the Capitalists renting his land to pay up a fraction of the surplus-profit
But not everything in the article is correct using Thermodynamics:
1) “If the same use-value could be obtained without labour, it would have no exchange-value,” is wrong .. example the oranges from a wild tree have value and cost no labor.
Here: Grow some orange trees yourself and put a lot of labor into that .. I will sell wild oranges next to you in the market next weekend .. I bet we get the same price and according to the article a lot more surplus-profit since I paid nothing for them …
2) “this increased productivity of labour” itself would not be converted into surplus-value were it not for the fact that capital appropriates the natural and social productivity of the labour used by it as its own.
“this increased productivity of labour” is optional .., Labor does not necessarily becomes more productive here.
The surplus-profit is due to cheaper overall costs to the waterwheel operation because they do not pay for the free energy of the river flow and the overall cost here (happen to be true in the example but can be false in general) are cheaper than the overall cost of steam operation because they pay for coal.
The surplus-profit is just the difference between individual cost vs average cost , and in this example the waterwheel operation is assumed to overall be cheaper than steam operation.
Labor is just another machine in the overall operation, nothing special, that is the main difference vs using thermodynamics which do not distinguish “living” energy from what? “dead energy” …
Energy is Energy regardless of the type of Energy and Work is only one regardless of which type of Energy is used.
Kumba Kiri: “Sorry but Marx was mistaken, he assumed the only source of wealth, value and prices is human labor”
Karl Marx: “Use-values like coats, linen, etc., in short, the physical bodies of commodities, are combinations of two elements, the material provided by nature, and labour. Ifwe subtract the total amount of useful labour of different kinds which is contained in the coat, the
linen, etc., a material substratum is always left. This substratum is furnished by nature without human intervention. When man engages in production, he can only proceed as nature does herself, i.e. he can only change the form of the materials.13 Furthermore, even in this work of modification he is constantly helped by natural forces. Labour is therefore not the only source of material wealth, i.e. of the use-values it produces. As William Petty says,
labour is the father of material wealth, the earth is its mother.*”
That’s from Chapter 1 (1.2) of Vol.1 of Capital… Try to get literally 10 pages into the book before making your ignorant and idiotic claims with such transparent pretentiousness.
All of your troubles flow from your inability to discern value (economic value, price) from use-value (utility, wealth). Your next confusion is but a more sophisticated version of the same:
Kumba Kiri: “A group of workers build a waterwheel using L hours of labor, the waterwheel therefore “stores” or can “transfer” at most L hours of labor to other transformations.
Regardless of the exact number L is finite and comparatively insignificant to the amount of wealth-value the waterwheel will create as it will function essentially forever while the river is flowing, perhaps millions of years.
That is what the Capitalists have figured out and why they become richer and richer, they keep for themselves all the wealth created beyond L, and perhaps some more if the workers are exploited and given less than L. ”
Karl Marx: “In this West of Scotland bourgeois brain, which has inherited the capitalist qualities of’ four generations’, the value of the means of production, spindles, etc., is so inextricably confused with the quality they possess, as capital, of valorizing themselves, or swallowing up every day a definite quantity of the unpaid labour of others, that the head of the firm of Carlile & Co. actually imagines that if he sells his factory, not only will the value of the spindles be paid to him, but, in addition, their power of self-valorization, not only the labour contained in them, which is necessary to the production of spindles of this kind, but also the surplus labour which they help to pump out daily from the brave Scots of Paisley.”
(Ch.11)
LTVEnthusiast
Your ignorant and idiotic counter-claims with such transparent pretentiousness are due to your basic ignorance of thermodynamics.
What Marx described is absolutely correct !! .. But MACHINES ALSO CAN DO EXACTLY THE SAME THING AS LABOR .. They can ALSO do the SAME transformations.. It is NOT a monopoly of LABOR
“the physical bodies of commodities, are combinations of two elements, the material provided by nature, and labour. If we subtract the total amount of useful labour of different kinds which is contained in the coat, the linen, etc., a material substratum is always left. This substratum is furnished by nature without human intervention. When man engages in production, he can only proceed as nature does herself, i.e. he can only change the form of the materials.13 Furthermore, even in this work of modification he is constantly helped by natural forces. Labour is therefore not the only source of material wealth, i.e. of the use-values it produces. As William Petty says,
labour is the father of material wealth, the earth is its mother.*”
You are also mistaken “assuming” I do not see the difference between
” value (economic value, price) from use-value (utility, wealth)”
My point IS that BOTH types of Values CAN ALSO BE DERIVED FROM MACHINES , NOT ONLY LABOR .. ( ..sigh.. LABOR is “just” one more machine type .. nothing special)
You and Marx “Postulated” the ONLY LABOR does that , WHY ? , What Scientific facts did you employ to do that ?
And about what Marx said ” Karl Marx: “In this West of Scotland bourgeois brain,… blah blah ..”
Yes he is also PARTIALLY correct about this, LABOR (like any other machine) produces wealth, and often (BUT NOT ALWAYS OR NECESSARILY) is appropriated by the Capitalists.
IT is ALSO possible that ALL WORKERS get a cut of the Wealth CREATED by the MACHINES above their labor .. EVERYBODY becomes wealthier.
The point is WHO gets WHAT from the WHOLE Operation.. And Capitalist “usually” have the upper hand and appropriate as they please , THIS is the problem in Capitalism (As it was in Slavery where the appropriation and exploitation was undeniable since machines contribution at that time was insignificant)
The example of the waterwheel PROVES that MOST OF THE WEALTH created by the waterwheel does NOT come from Labor L .
Replace Waterwheel with all the hydroelectric plants in the World today and in the future .. the same argument applies. All that electricity is a valuable commodity and MOST OF IT WILL BE CREATED BY THE MACHINE, NOT LABOR !
Please study some thermodynamics , you will HAVE TO accept without a doubt that MACHINES and LABOR ARE THE SAME THING .. MACHINES !!
LTVEnthusiast
Your ignorant and idiotic counter-claims with such transparent pretentiousness are due to your basic ignorance of thermodynamics.
What Marx described is absolutely correct !! .. But MACHINES ALSO CAN DO EXACTLY THE SAME THING AS LABOR .. They can ALSO do the SAME transformations.. It is NOT a monopoly of LABOR
“the physical bodies of commodities, are combinations of two elements, the material provided by nature, and labour. If we subtract the total amount of useful labour of different kinds which is contained in the coat, the linen, etc., a material substratum is always left. This substratum is furnished by nature without human intervention. When man engages in production, he can only proceed as nature does herself, i.e. he can only change the form of the materials.13 Furthermore, even in this work of modification he is constantly helped by natural forces. mLabour is therefore not the only source of material wealth, i.e. of the use-values it produces. As William Petty says,
labour is the father of material wealth, the earth is its mother.*”
You are also mistaken “assuming” I do not see the difference between ” value (economic value, price) from use-value (utility, wealth)”, but this is not main point here, it is about if only labor can create wealth, thermodynamics proves that is not the case, therefore Marx was wrong about that and all the logical inferences based on that assumption are rubbish.
My point IS that BOTH types of Values CAN ALSO BE DERIVED FROM MACHINES , NOT ONLY LABOR .. ( ..sigh.. LABOR is “just” one more machine type .. nothing special, but inefficient and very slow when compared to well engineered non-human machines)
You and Marx “Postulated” that ONLY LABOR does that , WHY ? , What Scientific facts did you employ to do that ?
And about what Marx said ” Karl Marx: “In this West of Scotland bourgeois brain,… blah blah ..”
Pssst .. Throwing around ideological value judgements does not make any argument more true or more false .. it is usually done by people that are more interested in being right than in seeking the truth.. dishonesty.
Yes he is also PARTIALLY correct about this, LABOR (like any other machine) produces wealth, and often (BUT NOT ALWAYS OR NECESSARILY) is appropriated by the Capitalists.
IT is ALSO possible that ALL WORKERS get a cut of the Wealth CREATED by the MACHINES above their labor .. EVERYBODY becomes wealthier.
The point is WHO gets WHAT from the WHOLE Operation.. And Capitalists “usually” have the upper hand and appropriate as they please , THIS is the problem in Capitalism (As it was in Slavery where the appropriation and exploitation was undeniable since machines contribution at that time was insignificant)
The example of the waterwheel PROVES that MOST OF THE WEALTH created by the waterwheel does NOT come from Labor L .
Replace Waterwheel with all the hydroelectric plants in the World today and in the future .. the same argument applies. All that electricity is a valuable commodity and MOST OF IT WILL BE CREATED BY THE MACHINE, NOT LABOR !
Please study some thermodynamics, you will HAVE TO accept without a doubt that MACHINES and LABOR ARE THE SAME THING .. MACHINES !!
Along with others I have a book on the relationship between thermodynamics, industrial production and value called Classical Econophysics, I suggest you have a look at it and also the book by Farjoun and Machover ‘Laws of Chaos’ which shows how the law of value is a emergent law founded on thermodynamics.
Paul
I read few sections a bit slower to ponder on the meaning better , there are some sections where the language itself does not seem to be expressing clearly what the author was thinking or assuming. Or he was struggling with very abstract concepts that are more clear to us now but was unknown at that time.
If this article was written by Marx may be there is a copy somewhere in German ? . Please post a link if possible..
For example the part about Cooperation, Division of labor which are social organisations which are called “social natural forces of labour arising from co-operation, division of labour..” Which the Capitalist also appropriate is very interesting , they not only grab for themselves the natural forces via Energy but also appropriate entropic issues for themselves! .. it is “their” organisation.
That is most interesting, in fact it might be talking about Entropy without even realising it , as social forces do not exist but entropy is the issue when you organise things in different ways and this also affects the overall efficiency (“social labor productivity” , a bunch of people are a bunch of machines and how they are organised does affect the overall efficiency too) .. it is not a force and it is not directly due to energy but how the energy is organised in the productive process is what the machines (man made constrains to force the heat flow “his free natural forces” in a way it can be used to produce useful work) or the river (natural constrain for the water flow which again allows useful work, a water wheel in the ocean does not work because the water flow is disorganised chaotic).
The productiveness of the invested capital that cannot be established “by the production process of the capital itself”
There are some places where the language is not precise, may be this is due to translations, and the original to compare might be helpful.
billjefferies
— Anyway what proportion of orange “production” is from wild trees?
That is what we are trying to compute using thermodynamics !
— That is a mathematical quantity.
– YES INDEED !
It is nil.
– It is NOT nil
The “tree” is a machine too (chemical reactor self-assembled by Nature without any human labor) . This machine (Like the waterwheel example CAN produce wealth WITHOUT HUMAN LABOR, the waterwheel example Algebra is trivial or not ?)
The transformation from natural sources , the chemicals in the soil and air , are transformed (this is what “LABOR” does when it is a human machine, it “transform” and creates wealth) by the tree into a valuable commodity “the orange”.
People want “the orange” , not the “harvesting” . If when you harvest the orange also pick up some rocks and try to sell them at the same time as the oranges, then ..
What people “WANT” and pay for (exchange) is what the “Tree” “without labor” “created”
– The labour theory of value is concerned with output that is produced, not wild,
The output was “produced” , created by the machine by itself !! ..
— and so the premise of your argument falls, mathematically and otherwise.
YOUR premises are wrong, Thermodynamics PROVE you wrong, Marx “postulated” it without any science to back him up and he was mistaken.
Are you a “Scientific” Socialist or a cult follower ?
Always the accounting of wealth creation in Marxist Economy will be wrong, because the Values that belong to any machine are “assigned” to the “Labor Account”
Whenever the arguments are based on aggregated work (like the differential rental article) the problem does not show up and he might be correct, but whenever it is necessary to differentiate the contributions from machines and labor it will be hopelessly wrong , as in “exploitation” .
“Exploitation” might or might not be happening .. sometimes workers “also” get a cut above their labor from the overall operation .. may be that is why many are “happy with Capitalism”.
It appears the concepts of “Use-value” and “Exchange-Value” were invented by Marx to make these thermodynamic inconsistencies “acceptable”..
Marx made It a mistake.. he was not Gott you know ..
Paul,
If I find copies of the books you suggested I will read them , however whatever they say does not invalidate or changes anything at all in what I wrote in this blog. The assumptions I made are accepted and proven Thermodynamic concepts, no speculation.
I read a summary of Farjoun, E. and Machover, M. (1983), Laws of Chaos: A probabilistic approach of political economy, by someone that used their approach for some publication and it starts like this .. In the next section we select (following FM) labour-content as the universal quantity.
They write that Farjoun, E. and Machover, M. (1983) also “selected” labour-content as the universal quantity !!
Well right then and there they made the same “postulate” as Marx .. labour-content IS NOT the universal quantity, IT IS ENERGY.
There is zero labour-content in a wild orange and in all the electricity production beyond L in the waterwheel example .. Sorry this will show nothing new and it is also flawed exactly as Marx LTV. The fact they used “statistics , random variables, chaos, etc does not make any difference, they made exactly the same mistake as Marx and whatever their results was will be flawed in the same way.
While looking for your Econo-Physics book I found a note (I think a blog or similar published by Ian Wright) that says; I co-authored a book, in 2009, that combined the classical approach to political economy (e.g., Smith, Ricardo, Marx) with the concept of statistical equilibrium more usually found in thermodynamics.
A statistical equilibrium, in contrast to a deterministic equilibrium that is normally employed in economic models, is ceaselessly turbulent and changing, yet the distribution of properties over the parts of the system is constant. It’s a much better conceptual approach to modelling a system with a huge number of degrees-of-freedom, like an economy.
If you can point me to a pdf copy great, I will read it and let you know my opinion.
Thermodynamics and Statistics I understand .. just keep in mind that even before reading the book can tell you that Thermodynamic “Equilibrium” is not possible for an Economy .. because it is an “Open System” with energy and mass constantly arriving from outside .. so lets start with that discrepancy between model and reality ..
Yes the economy is an open system, but the point is that many higher order properties of an economy are regulated by statistical laws that map onto the laws previously examined in thermodynamics. You should actually read the econophysics theorists rather than rely on second order accounts of them. Read Farjoun, Machover, Wright and Yakovenko in the original.
Paul, this is a great article. too bad this kumba kiri guy doesn’t seem to understand the ltv all too much.
No robots or machine can create new value .
Imagine we have two very big boxes that we can not see what is inside them . But we know that, in one of them there is a machine that can produce 100 years of our need for cars , no matter how many it is , and is able to produce its own raw material and energy and maintains itself for 100 years and then evaporates and is being run by robots only . In the other one there are just enough cars inside , that matches our need for cars for 100 years of matter how many we need . These boxes are identical in every aspect so we cannot know which one is which and you can never open them .how much do you pay for each box before start of this game? Their price is the same because no matter which one you choose you will get 100 years of cars that you need . . So price of the box with machine is equal to the price of the box that has the cars inside . So during this 100 years , the machine only transferred it’s value to its products and no new value is created .