Wednesday, February 25, 2009

Using Marx’s analysis against Marxist critique

Marxian economic analysis and Marxist critique of capitalism—the value judgments Marx's followers have typically made about capitalists and capitalist enterprises—do not sit together as well as is often thought.

Marx's labour theory of value says value is created by socially necessary abstract labour time. Any particular worker working on any particular thing may, in fact, not successfully create value. But, if something has value, that value is equal to the socially necessary abstract labour time embodied in that thing.

Thus labour as-it-is-in-the-world (“crude labour”) is distinct from labour-that-creates-value. A distinction necessary to give the labour theory of value any chance of working, since it is perfectly obvious that labour can be misapplied to varying degrees, that not everything with exchange value is the product of labour, not everything produced by labour has value and the exchange value of something can shift dramatically after it has been produced

The problem with this distinction between “crude” labour and socially necessary abstract labour time (apart from difficulties with it as a theory of value) is that it destroys the moral judgement that is derived from the labour theory of value—that is, that surplus value is exploitative because only workers create value.

If crude labour =/= value, then we do not know, until it is validated by exchange, whether any particular labour effort has created value or not (and how much). So, clearly there is a role in organising labour to attempt to create value. There is also the matter of covering risks involved in producing value. This not a matter of risk per se – any form of income in the production process involves risk: hence, for example, the risk premium for particular jobs. It is a matter of providing a guarantee for income variability from the uncertainty about whether exchange-value will be created or not sufficient to cover the costs of production.

Hence profit is not exploitation, it is the return on a necessary economic role given that output of crude labour =/= value.

Moreover, wider returns to capital are also justified, since the level of capital determines how much socially necessary abstract labour time is needed to create value. The more effectively applied the capital, the more value is created and the higher the return to labour.

So, while the analytical form of the labour theory of value separates the socially necessary abstract labour time that creates value from “crude labour”, it does so at the cost of demolishing the basis for the normative conclusions of Marxism embodied in the theory of surplus value-as-exploitation.


  1. Dear Lorenzo,

    One should write a critique to anihilate the false conception. But it seem you are not familiar with simple definition and use of term.

    Abstraction is part and and parcel of any scientific process. It exist in all sphere of life, whether it is related to natural science or social science or huminities or other field of study. It is a process in which we eliminate redundant information to make it universal. When this universal connected with particular which is eliminated during abstraction, it become real. As this particular depends on circumstances , connection of particular beget different realities. Now read Capital of Marx, I hope you will not come on such rediculas conclusion.

    Again, I want to say, please don't make hype of Risk. Risk Incentive is part and parcel of propaganda of our present system. What is Risk? What is cause of Risk?

    Uncertainties beget Risk. Future is always uncertain.

    We have designed an instrument what is called Planning. Planning is a process in which we analyse the uncertainties and took steps to minimise its effect.

    Capitalist having big work force for this planning whereas common people whose only source of income is his own labor do it empirically.

    Now, I ask you why you are only concentrating on risk of capitalist whereas in production process everyone take risk?

    Lastly, I want to advise you please don't write such rediculas article if you are not paid for it or are not part and parcel of capitalist propaganda machinary.


    arun singh

  2. Arun, risk and uncertainty are not the same thing, as I discuss here.

    The problem is not the use of abstraction, given even what I call "crude labour" is an abstraction, the point is use of inconsistent abstractions.

    As for reading Capital, I linked to my critique of the failure of Marx's argument from the first chapter of Capital showing how Marx's argument for the labour theory of value clearly fails.