“The strange thing about the value theory is that it considers human labour as fundamentally different from all other processes in nature, for example, from the labour of animals. This shows clearly that the theory is based ultimately upon a moral theory, the doctrine that human suffering and a human lifetime spent is a thing fundamentally different from all natural processes. We can call this the doctrine of the holiness of human labour. Now I do not deny that this theory is right in the moral sense; that is to say, that we should act according to it. But I also think that an economic analysis should not be based upon a moral or metaphysical or religious doctrine of which the holder is unconscious. Marx who, as we shall see in chapter 22, did not consciously believe in a humanitarian morality, or who repressed such beliefs, was building upon a moralistic basis where he did not suspect it—in his abstract theory of value. This is, of course, connected with his essentialism: the essence of all social and economic relations is human labour.” (Popper 1949: 329, n. 24).And we can go on and say: from an economic perspective the labour theory of value – if it really is meant to be an empirical concept – is empirically unsupported and untenable.
If we consider a given array of factor inputs used in a production process, what can transform those factor inputs into an output commodity that can fetch a price on a market? The following factors:
(1) some type of labour to transform the factor inputs into an output commodity, andBut is free human wage labour the only thing that can fulfil (1)? It is clearly not.
(2) a demand for the output commodity and a person or people willing to buy it.
We have a number of sources of labour power as follows:
Types of Labour PowerYou can produce commodities that fetch money profits by methods (1), (3) and (4) and clearly Marx’s nebulous labour value and surplus labour value are not necessary conditions for either production of commodities or monetary profits.
(2) free human wage labour;
(3) animal labour;
(4) machines powered by forces of nature (e.g., wind driving a wind-mill or water driving a water wheel) or machines and robots powered by natural forces produced by human technology (e.g., steam or electricity).
In fact, animals are a much underrated source of labour power: right into the early 20th century animal labour power was a fundamental source of labour even in advanced capitalist economies (think here of horse power used in transportation and farming). Even today all over the developing capitalist world animal labour is very important, just as it was in the 19th century.
What is more, as production becomes more and more automated by machines, robots and artificial intelligence, we could easily imagine a world in which capitalism continues and money profits continue, but human labour falls towards zero. So where, if surplus labour value is the source of money profit, would profit come from in such a world? Of course, this is just a pseudo-problem because the labour theory of value is false and does not explain profits in the first place.
In short, the Marxist labour theory of value makes a fetish of free human labour power, and, as Popper argued, probably as a moral idea, not as a meaningful and justifiable economic concept.
Popper, Karl Raimund. 1949. The Open Society and its Enemies, Volume 2. Routledge & K. Paul, London.