“If one ounce of gold, one ton of iron, one quarter of wheat and twenty yards of silk are exchange-values of equal magnitude or equivalents, then one ounce of gold, half a ton of iron, three bushels of wheat and five yards of silk are exchange-values which have very different magnitudes, and this quantitative difference is the only difference of which as exchange-values they are at all capable. As exchange-values of different magnitudes they represent larger or smaller portions, larger or smaller amounts of simple, homogeneous, abstract general labour, which is the substance of exchange-value. The question now arises, how can these amounts be measured? Or rather the question arises, what is the quantitative form of existence of this labour, since the quantitative differences of the commodities as exchange-values are merely the quantitative differences of the labour embodied in them. Just as motion is measured by time, so is labour by labour-time. Variations in the duration of labour are the only possible difference that can occur if the quality of labour is assumed to be given. Labour-time is measured in terms of the natural units of time, i.e., hours, days, weeks, etc. Labour-time is the living state of existence of labour, irrespective of its form, its content and its individual features; it is the quantitative aspect of labour as well as its inherent measure. The labour-time materialised in the use-values of commodities is both the substance that turns them into exchange-values and therefore into commodities, and the standard by which the precise magnitude of their value is measured. The corresponding quantities of different use-values containing the same amount of labour-time are equivalents; that is, all use-values are equivalents when taken in proportions which contain the same amount of expended, materialised labour-time. Regarded as exchange-values all commodities are merely definite quantities of congealed labour-time.The crucial point about abstract socially-necessary labour time is that:
The following basic propositions are essential for an understanding of the determination of exchange-value by labour-time. Labour is reduced to simple labour, labour, so to speak, without any qualitative attributes; labour which creates exchange-value, and therefore commodities, is specifically social labour; finally, labour in so far as its results are use-values is distinct from labour in so far as its results are exchange-values.
To measure the exchange-value of commodities by the labour-time they contain, the different kinds of labour have to be reduced to uniform, homogeneous, simple labour, in short to labour of uniform quality, whose only difference, therefore, is quantity.
This reduction appears to be an abstraction, but it is an abstraction which is made every day in the social process of production. The conversion of all commodities into labour-time is no greater an abstraction, and is no less real, than the resolution of all organic bodies into air. Labour, thus measured by time, does not seem, indeed, to be the labour of different persons, but on the contrary the different working individuals seem to be mere organs of this labour. In other words the labour embodied in exchange-values could be called human labour in general. This abstraction, human labour in general, exists in the form of average labour which, in a given society, the average person can perform, productive expenditure of a certain amount of human muscles, nerves, brain, etc. It is simple labour [English economists call it “unskilled labour”] which any average individual can be trained to do and which in one way or another he has to perform. The characteristics of this average labour are different in different countries and different historical epochs, but in any particular society it appears as something given. The greater part of the labour performed in bourgeois society is simple labour as statistical data show. Whether A works 6 hours producing iron and 6 hours producing linen, and B likewise works 6 hours producing iron and 6 hours producing linen, or A works 12 hours producing iron and B 12 hours producing linen is quite evidently merely a different application of the same labour-time. But what is the position with regard to more complicated labour which, being labour of greater intensity and greater specific gravity, rises above the general level? This kind of labour resolves itself into simple labour; it is simple labour raised to a higher power, so that for example one day of skilled labour may equal three days of simple labour. The laws governing this reduction do not concern us here. It is, however, clear that the reduction is made, for, as exchange-value, the product of highly skilled labour is equivalent, in definite proportions, to the product of simple average labour; thus being equated to a certain amount of this simple labour.
The determination of exchange-value by labour-time, moreover, presupposes that the same amount of labour is materialised in a particular commodity, say a ton of iron, irrespective of whether it is the work of A or of B, that is to say, different individuals expend equal amounts of labour-time to produce use-values which are qualitatively and quantitatively equal. In other words, it is assumed that the labour-time contained in a commodity is the labour-time necessary for its production, namely the labour-time required, under the generally prevailing conditions of production, to produce another unit of the same commodity.”
Marx, Karl. 1859. A Contribution to the Critique of Political Economy (trans. S.W. Ryazanskaya)
(1) it is an abstract labour time, not raw or direct labour hours;This is also explained in volume 1 of Capital as follows:
(2) socially necessary in the sense that is not labour made in error or wasted;
(3) abstract labour time in the sense that all “different kinds of labour” can be reduced to a “uniform’ and “homogeneous” simple labour, which is abstract labour time of a “uniform quality, whose only difference, therefore, is quantity.”
“It might seem that if the value of a commodity is determined by the quantity of labour expended to produce it, it would be the more valuable the more unskilful and lazy the worker who produced it, because he would need more time to complete the article. However, the labour that forms the substance of value is equal human labour, the expenditure of identical human labour-power. The total labour power of society, which is manifested in the values of the world of commodities, counts here as one homogeneous mass of human labour-power, although composed of innumerable individual units of labour-power. Each of these units is the same as any other, to the extent that it has the character of a socially average unit of labour-power and acts as such; i.e. only needs, in order to produce a commodity, the labour time which is necessary on an average, or in other words is socially necessary. Socially necessary labour-time is the labour-time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society. ….It is quite clear that the attempt of some people sympathetic to Marx to use raw labour hours as a measure of abstract socially-necessary labour time won’t do at all. That is not what Marx meant by abstract socially-necessary labour time.
What exclusively determines the magnitude of the value of any article is therefore the amount of labour socially necessary, or the labour-time socially necessary for its production. The individual commodity counts here only as an average sample of its kind. Commodities which contain equal quantities of labour, or which can be produced in the same time, have therefore the same value. The value of a commodity is related to the value of any other commodity as the labour-time necessary for the production of the one is related to the labour-time necessary for the production of the other. ‘As exchange-values, all commodities are merely definite quantities of congealed labour-time.’” (Marx 1982: 129–130).
“If we leave aside the determinate quality of productive activity, and therefore the useful character of the labour, what remains is its quality of being an expenditure of human labour-power. Tailoring and weaving, although they are qualitatively different productive activities, are both a productive expenditure of human brains, muscles, nerves, hands etc., and in this sense both human labour. They are merely two different forms of the expenditure of human labour-power. Of course, human labour-power must itself have attained a certain level of development before it can be expended in this or that form. But the value of a commodity represents human labour pure and simple, the expenditure of human labour in general. And just as, in civil society, a general or a banker plays a great part but man as such plays a very mean part, so, here too, the same is true of human labour. It is the expenditure of simple labour-power, i.e. of the labour-power possessed in his bodily organism by every ordinary man, on the average, without being developed in any special way. Simple average labour, it is true, varies in character in different countries and at different cultural epochs, but in a particular society it is given; More complex labour counts only as intensified, or rather multiplied simple labour, so that a smaller quantity of complex labour is considered equal to a larger quantity of simple labour. Experience shows that this reduction is constantly being made. A commodity may be the outcome of the most complicated labour, but through its value it is posited as equal to the product of simple labour, hence it represents only a specific quantity of simple labour. The various proportions in which different kinds of labour are reduced to simple labour as their unit of measurement are established by a social process that goes on behind the backs of the producers; these proportions therefore appear to the producers to have been handed down by tradition.” (Marx 1982: 134–135).
Nor does the market price human wage labour in terms of what Marx means by abstract socially-necessary labour time. Marx in the Contribution to the Critique of Political Economy (1859) seems to imply that the market does actually price commodities produced by labour in these terms:
“The laws governing this reduction do not concern us here. It is, however, clear that the reduction is made, for, as exchange-value, the product of highly skilled labour is equivalent, in definite proportions, to the product of simple average labour; thus being equated to a certain amount of this simple labour.”This is utterly untrue. To believe so is obviously empirically false, and Marx can’t even explain or provide evidence of how it happens. In reality, wages are actually set – though to varying degrees in different sectors – by (1) social and institutional factors, (2) supply and demand and (3) to some extent by how people subjectively value labour, not by reckoning the abstract socially-necessary labour time required by the worker to produce whatever commodities he creates.
According to Marx, all concrete, qualitatively different labour time can be reduced to abstract labour time that is quantitatively measurable in a uniform, homogeneous unit. Abstract labour is the “value-forming substance” (Marx 1982: 129).
My charge against Marx is pure and simple: he has never adequately explained how to reduce all heterogeneous human labour to such abstract socially-necessary labour time.
How do you take an average of labour time when labour is such a heterogeneous factor, with so much difference in profession, skill, speed, competence, experience, and nature of work?
What do you average? Average energy expended in the work of average workers from each profession? When Marx says, “all labour is an expenditure of human labour-power, in the physiological sense, and it is in this quality of being equal, or abstract, human labour that it forms the value of commodities” (Marx 1982: 137), this suggests that “physiological” measurement of labour would have to be done in terms of energy expended. But that seems to be a grossly unsatisfactory and crude way to compare or aggregate
(1) intellectual work (e.g., work in, say, mathematics, physics, legal professions, advertising, etc.) andThe qualitative difference between these two types of labour is profound, and it is difficult to see how even aggregating them by energy expended does justice to the difference between mental and manual labour. In short, even if energy expended is proposed as a homogeneous unit by which to measure heterogeneous labour, it still has insuperable difficulties.
(2) manual labour (e.g., the work of a brick-layer, mover, road-worker, etc.).
Without a convincing explanation of how to reduce all heterogeneous labour to a meaningful, common and homogeneous unit, you can’t aggregate a society’s total labour power nor provide any meaningful, universal measure of the supposed labour value of any commodity.
Marx, Karl. 1859. A Contribution to the Critique of Political Economy (trans. S.W. Ryazanskaya)
Marx, Karl. 1982. Capital. Volume One. A Critique of Political Economy (trans. Ben Fowkes). Penguin Books, Harmondsworth, England.