Friday, May 8, 2015

Marx’s Abstract Socially-Necessary Labour Time in A Contribution to the Critique of Political Economy and Capital

Here is a definition of abstract socially-necessary labour time in Marx’s A Contribution to the Critique of Political Economy (1859) that seems more lucid than the one in Capital:
“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 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)
https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch01.htm
The crucial point about abstract socially-necessary labour time is that:
(1) it is an abstract labour time, not raw or direct labour hours;

(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.”
This is also explained in volume 1 of Capital as follows:
“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. ….

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).
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.

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.) and

(2) manual labour (e.g., the work of a brick-layer, mover, road-worker, etc.).
The 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.

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.

BIBLIOGRAPHY
Marx, Karl. 1859. A Contribution to the Critique of Political Economy (trans. S.W. Ryazanskaya)
https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/index.htm

Marx, Karl. 1982. Capital. Volume One. A Critique of Political Economy (trans. Ben Fowkes). Penguin Books, Harmondsworth, England.

23 comments:

  1. This is utterly untrue. To believe so is obviously empirically false, and Marx can’t even explain or provide evidence of how it happens.

    This is odd, considering that I just went to the market today and I wasn't charged dozens of different prices using different numeraires for each of the different forms of labor that went into producing my breakfast.

    Clearly, your empirical experience differs from mine. Filing taxes must be *really* complicated, wherever you live.

    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?

    "How do you take an average number of objects serving as means of transportation per household, with all these different makes and models, top speeds, number of wheels, gas efficiencies...?"

    You use a common, abstract unit: "the vehicle."

    With labor, similarly: "the hour." Nobody works outside of time.

    What do you average?

    Time.

    Average energy expended in the work of average workers from each profession?

    No, time.

    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.

    You're making this into a much bigger process than Marx did. We don't have to spend time averaging social labor as participants in the economy, because the relationship of production and market exchange does that as an emergent phenomenon under capitalism. Marx calls this the "law of value."

    I asked elsewhere, but it's relevant again. Do you deny any of the following:
    - That there is a finite total amount of social labor time in a given period?
    - that a portion of that finite total goes into each commodity on the market?
    - that said market price may differ from the monetary expression of that labor time?

    (Incidentally, if your whole issue is that you don't get the "monetary expression" part in that third one, then you're in luck: both I and Andrew Kliman have pointed out numerous sources to you from which you can read about the "MELT." It was at the end of March, if that helps.)

    ReplyDelete
    Replies
    1. (1) if you think market prices of commodities directly correspond to the alleged SNLT supposed required to produce them you are simply a liar, an ignoramus or a joker. That you think anyone who isn't a Marxist cultist is going to believe this rubbish also speaks volumes.

      I challenged you to show me how -- with clear evidence -- the market supposed does what you say. You cannot do so.

      (2) "We don't have to spend time averaging social labor as participants in the economy, because the relationship of production and market exchange does that as an emergent phenomenon under capitalism."

      Utterly untrue and a figment of your imagination. Once again you can't provide any evidence of how it happens and there isn't any.

      As I said, wages are determined 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. The empirical evidence supports what I say; all we get from you is quasi-religious dogma.

      Delete
    2. Not to mention the fact that for ages now you have been adamant that the LTV doesn't actually explain individual price formation at all, but only describes it at an aggregate level that any reasonable person can see is an utterly vacuous analytic definition and has no explanatory power.

      But now you are actually telling us that real world markets do in real life create wage rates and commodity prices equal to SNLT by some mysterious process you can't explain or give evidence for.

      If nothing else, at least you are not ashamed to be outrageously incoherent.

      Delete
    3. (1) FFS, LK, ditch this preposterous straw man. We spent most of a month getting you to see that Marx's theory holds that individual prices diverge from individual values. How on earth are you going to make me prove to you that "market prices of commodities directly correspond to the alleged SNLT supposed required to produce them" when it's a claim I have consistently rejected? Stop this at once.

      (2) The evidence is literally nothing more than the fact that the market evaluates everything in monetary terms. I've said it like six times now: It's an empirical datum. There's nothing to prove; just go outside and buy a soft drink, and see how many prices they charge you for all the disparate kinds of labor that went into it.

      The claim here is no more complicated than that, and if you wish to argue against one that is, then know that it too is a straw man.

      As I said, wages are determined by

      Quote me saying that wages directly and exactly correspond to the value of labor-power. Take as long as you need; I can use all these straw men you've been leaving around as a makeshift seat while I wait.

      Not to mention the fact that for ages now you have been adamant that the LTV doesn't actually explain individual price formation at all, but only describes it at an aggregate level that any reasonable person can see is an utterly vacuous analytic definition and has no explanatory power.

      You've misstated my claim probably dozens of times by now, so I'm used to it. I've stated that individual prices diverge from individual values, but the sums are equal in aggregate. You read that and come away with "LTV doesn't actually explain individual price formation at all." That's like being told that an angle in a triangle can diverge from 90 degrees, and concluding "your right-angle theory of triangle can't tell us anything at all about individual angles!"

      It so badly misinterprets both the claims and goal of the theory, I'd classify it as "not even wrong."

      But now you are actually telling us that real world markets do in real life create wage rates and commodity prices equal to SNLT by some mysterious process you can't explain or give evidence for.

      LK. Either provide a quote of me claiming that markets "create wage rates and commodity prices equal to SNLT," or shut the hell up. I'm getting a headache from the sound of the bar constantly being lowered on your argumentation.

      Delete
    4. So let me get this straight:

      (1) you do not assert that the market causes prices to directly correspond to the alleged SNLT supposed required to produce them.

      (2) yet you go on to imply that money prices vindicate the LTV.
      --------
      Or, if in (2) you are only saying that the market produces prices that value labour in a homogeneous unit (money), not only have I said I agree with this, but my point is that it does not vindicate the LTV, nor show how wages are determined by the SNLT required to produce commodities by workers, which you appear to concede in (1).

      At this point, it is clear your comments are incoherent and incapable of consistency and that you are either (1) very confused or (2) just being a troll.

      Delete
    5. (1) Bingo.

      (2) No. I'm not even sure what you mean by "vindicate the LTV," but I suspect it's not something I care about doing.

      All I've been claiming of money prices is that they form a common standard of measurement against which we can judge all the heterogeneous things in the economy, from chalk and cheese to weaving and welding. It's the "general equivalent."

      Or, if in (2) you are only saying that the market produces prices that value labour in a homogeneous unit (money), not only have I said I agree with this

      FINALLY.

      but my point is that it does not vindicate the LTV

      I already told you, I don't care about "vindicating" any "LTV"; I just care about getting to the point where you are able to restate Marx's theory correctly. I suspect we're slowly but surely getting there; you've stopped saying AHA! at the fact that value and price diverge, and you agree that money acts as a general equivalent. It's by baby steps and the occasional pulling of teeth, but we're getting there nonetheless.

      nor show how wages are determined by the SNLT required to produce commodities by workers, which you appear to concede in (1).

      Well, yeah, because wages aren't determined "by the SNLT required to produce commodities by workers." Nowhere have I claimed that they are. Wages are determined by factors like supply and demand for labor, by institutional arrangements and convention, etc., as you (and Marx!) say.

      A long time ago I directed you to an essay by William Baumol ("Marx and the Iron Law of Wages") that clears up several of these misconceptions. I once more urge you to look it up. You've referenced Baumol numerous times in the past (especially on the issue of Say's Law), so I should think he's a scholar you'd take seriously.

      it is clear your comments are incoherent and incapable of consistency

      No such thing is "clear"; you're just lashing out again. Knock it off.

      And no, I'm not confused. There's no contradiction in saying on one hand that "prices do not directly correspond to value" and on the other hand saying "wages do not directly correspond to the value of the commodities produced" (which, btw, would make profit impossible except in cases where goods sold above their value).

      Try again. Or, better yet, don't; instead, focus on the material instead of me.

      Delete
    6. You've conceded virtually all major points, which makes a mockery of your endless attempts above to challenge my argument.

      "I already told you, I don't care about "vindicating" any "LTV";"

      And this is such a comical statement one wonders how you can say it with a straight face. Nearly all your comments on this blog are lame attempts to defend the LTV.

      Delete
    7. It is also absurd how you utterly ignore the statements of Marx right in front of your face:

      "“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 not how real world money prices work. You do not even have the honesty to admit this. Instead you throw up endless carping nonsense and red herrings.

      Delete
    8. You've conceded virtually all major points, which makes a mockery of your endless attempts above to challenge my argument.

      No, you have. My arguments have remained consistent over the past month and a half. When challenged, you can't even quote me saying the nonsense you attribute to me. To see you declaring victory now is beyond pathetic.

      Nearly all your comments on this blog are lame attempts to defend the LTV.

      If that's really what you think, you haven't been paying attention. 100% of my comments on this blog have been to try to get you to understand Marx's value theory — which neither he nor I have ever referred to as this "LTV" business of yours, which you yourself rightly criticized as a crappy name. As I've said. And said. At this point I suspect you're just using it to bust my chops. Am I close to the mark?

      Look, I want you to be able to critique it effectively, and I've said as much multiple times. (It seems the things I say the most are the things you receive the least!) However, this cannot happen if you're only attacking straw men, of which you seem to have an endless warehouse. A theory should be able to stand or fall on its own merits; we shouldn't need to invent things about it to render it true or false.

      It is also absurd how you utterly ignore the statements of Marx right in front of your face:

      Why do you think I've ignored this? The bolded part should be obvious. If we're talking about "product," then a skilled craftsman who produces at 2x the rate of the average craftsman has demonstrated a "definite proportion." (If we're talking about labor that only exists in its skilled form, then that labor also incorporates the social average depreciated cost of training and related requirements into it, in addition to the intensity/proficiency we observed in the case of the craftsmen. You could have easily reasoned out for yourself, but instead you continue to act as if it's not important to understand a theory. Who taught you science?)

      This is not how real world money prices work.

      Heh. Maybe not to you; you're in the UK, correct? So for you doctors and professors are pretty damn affordable. Here in the USA, though, an hour of a doctor's time generally runs you a higher bill than an hour of a grocer's. You'll just have to take my word for it, I guess!

      Delete
    9. LK
      Above Hedlund says the sums are equal in the aggregate. Let's examine this for a moment. This aggregate can only be over a period of time. It does not make sense in this context to save some of the particular incident. So let us examine a period of time, for example one week or one month.it is reasonable to sue him that the relevant labor will be constant over this period, certainly when we are dealing with short. Such as a week or month. This will certainly be true statistically if we look at aggregates over a period of a few years.however sums of places or wages will not be over that. In general. This is easy to see in for instance and economy experiencing hyperinflation. I believe that headlands plane is therefore demonstrably false, or that he will find a way to redefine the terms sums or aggregate or equal.

      Delete
    10. Ken: Changes in the value of money would affect both the price/value sides of the equation equally, since both are evaluated in money terms. Happy to help as always.

      Still waiting on that apology, btw. What would it cost you?

      Delete
    11. This makes your claim about sums being equal in aggregate nugatory. You're simply defined them to be equal. That is LK's main charge against you isn't it?

      No one owes you an apology. You are habitually rude.

      Delete
    12. Ken: That's how accounting identities work.

      And how rude would you say I am? Scale of one to ten. I'm sure you have numerous examples, too? Because so far in our conversation, of the two of us, you are the only one who has insulted the other's intelligence. Further, out of the three of us (roping in LK), I am the only one who has offered an apology and retraction when another told me that I overstepped.

      Perhaps this is some regional difference in our respective usage of the word "rude"?

      Delete
    13. You first measured in labor. Then in hours. Nowin money. So let's end the word games.
      Write your equation. Define your terms, show which sum equals which other sum. I expect mathematics, not a link. Or rather, I am asking for mathematics; what I expect is different.

      Delete
    14. You first measured in labor. Then in hours.

      Do you see why I say y'all are not grokking this? How do you measure "labor"? Specifically and explicitly in temporal terms. These are the same.

      Nowin money.

      No, that's been constant, too. Marx places value in terms of money (the form of appearance of value) more often than not.

      Your current request amounts to a complete formalization or set thereof of Marx. I can't even use links, apparently. And this medium isn't exactly TeX friendly. And you've insulted me and flatly refused to apologize.

      Your request is frankly unreasonable. How about we compromise; I give you a link to a whole slew of formalizations, and then I'll answer any questions you may have, on the condition that you retract your insult. Easy, right?

      I, too, have a request and expectations that differ.

      Delete
  2. I don't think it's possible to measure abstract labor and I don't think Marx intended to say so and I don't think he tried to measure it. Marx didn't intend to compute prices or to determine individual prices. He tried to EXPLAIN them and critic classical economists, so that he created a model of capitalism and he had to make some basic, fundamental assumptions considering labor for example. It doesn't mean his theory is not scientific nor is not empirically valid. He just tried to show the inner logic of form of appearances like prices. There are some Marxists, who successfully apply his theory, predict and explain some things, but of course their method cannot fully correspond to Marx theory, they have to make some additional assumptions. This is a SOCIAL science, not physics and Marx knew that very well.

    ReplyDelete
  3. Appologies LK, I'm going off topic here, but I'm hoping I could take the opportunity to ask:
    Hedlund, do you have a blog or something that one can read? You seem to be knowledgeable about marxist political economics and write clearly so I figured I'd ask, as I would like to try to read up on it.
    (Btw, are you swedish? Your name looks swedish.)

    ReplyDelete
    Replies
    1. K.S.: I've thought about starting one for some time now. Maybe I'll go for it this summer. In the meantime, I recommended some blogs and resources in this comment.

      Also, not a Swede, though I grew up listening to Gothenburg-scene metal. :)

      Delete
    2. You should!
      I actually know of the blogs and will try to make more of an effort with them. The reason I don't is I find them both dense and consist of mostly very long posts. I find the blog format to be very usefull in introducing yourself to a topic, and as far as economics is concerned there are numerous leftish keynesian and neoclassical blogs that work well for novices too. I haven't found any such ones for marxist economics however, which I think is really unfortunate.
      Thanks for the response.

      Delete
    3. K.S.: You're right, they can be a touch wordy (though no one tops Sam Williams over at Critique of Crisis Theory on longwindedness). I think Marxists do tend that way. More accessible materials are sorely needed. It's also a crying shame Marxists don't have anything on the order of, say, the Anarchist FAQ.

      That's definitely a good point for me to bear in mind, thanks!

      Delete
    4. Ah yes, Crisis Theory - that blog gives me nightmares, hehe. I will try keep an eye out for the potential blog, if that's possible.
      You don't happen to be on Twitter, I presume?

      Delete
    5. K.S.: @cenochron

      I rarely tweet (I tend to use it more as a sort of fav-based Pinterest), but that may change, too.

      Delete
  4. You write, prices are determined "by (1) social and institutional factors, (2) supply and demand and (3) to some extent by how people subjectively value labour..."

    Is the number of people working in different sectors of the economy a social factor? Or the age distribution of a population?

    Is the amount of education and training an institutional factor? Is the amount of property (if any) held by a family?

    By "supply and demand," do you mean some sort of consumer soverignty, which is fundamentally a psychological phenomenon, intersecting with supply offered on according to marginal revenue?

    Do you mean by how employers value labor? Or do you mean wages are fundamentally determined by the utility function of workers?

    ReplyDelete