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.