Monday, March 7, 2016

Böhm-Bawerk on Marx’s Problem of Aggregating Heterogeneous Human Labour

Böhm-Bawerk, in his 1896 essay “Karl Marx and the Close of His System,” understood the problem well:
“ … [sc. Marx] declares that labor … means the ‘expenditure of simple [unskilled] labor power, an average of which is possessed in his physical organism by every ordinary man, without special cultivation"; or in other words ‘simple average labor’ (I, 51, and also previously in I, 46).

‘Skilled labor,’ he continues, ‘counts only as concentrated or rather multiplied unskilled labor, so that a small quantity of skilled labor is equal to a larger quantity of unskilled labor. That this reduction is constantly made experience shows. A commodity may be the product of the most highly skilled labor, but its value makes it equal to the product of unskilled labor, and represents therefore only a definite quantity of unskilled labor. The different proportions in which different kinds of labor are reduced to unskilled labor as their unit of measure are fixed by a social process beyond the control of the producers, and therefore seem given to them by tradition.’

This explanation may really sound quite plausible to the hasty reader, but if we look at it coolly and soberly we get quite a different impression.

The fact with which we have to deal is that the product of a day’s or an hour’s skilled labor is more valuable than the product of a day's or an hour's unskilled labor; that, for instance, the day's product of a sculptor is equal to the five days’ product of a stone-breaker. Now Marx tells us that things made equal to each other in exchange must contain ‘a common factor of the same amount,’ and this common factor must be labor and working time. Does he mean labor in general? Marx's first statements up to page 45 would lead us to suppose so; but it is evident that something is wrong, for the labor of five days is obviously not ‘the same amount’ as the labor of one day. Therefore Marx, in the case before us, is no longer speaking of labor as such but of unskilled labor. The common factor must therefore be the possession of an equal amount of labor of a particular kind, namely, unskilled labor.

If we look at this dispassionately, however, it fits still worse, for in sculpture there is no ‘unskilled labor’ at all embodied, much less therefore unskilled labor equal to the amount in the five days’ labor of the stone-breaker. The plain truth is that the two products embody different kinds of labor in different amounts, and every unprejudiced person will admit that this means a state of things exactly contrary to the conditions which Marx demands and must affirm, namely, that they embody labor of the same kind and of the same amount!.” (Böhm-Bawerk 1949 [1896]: 81–82).
This is correct: Marx faces the problem of reducing all heterogeneous human labour to a homogeneous abstract socially necessary labour time unit, but does not properly explain how this happens.

First, Marx suggests that the reduction of skilled labour to a simple unit of abstract labour can be conducted in a physical or scientific manner by examining the “expenditure of human brains, nerves, and muscles.” But it is utterly unclear how one can aggregate the labour of a human surgeon or solicitor and that of brick-layer, and Marx quickly passes over the problem.

But then Marx states that:
“Experience shows that this reduction is constantly being made. A commodity may be the product of the most skilled labour, but its value, by equating it to the product of simple unskilled labour, represents a definite quantity of the latter labour alone. The different proportions in which different sorts of labour are reduced to unskilled labour as their standard, are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom.” (Marx 1906: 51–52).
Note that such an argument only works if commodities tend to exchange at their true labour values.

But since Marx admits that most commodities do not even exchange for their true labour values by volume 3 of Capital, this argument does not work. The whole thing falls apart; it collapses like a house of cards. Marx is left with the need for a physical or scientific manner of aggregating all heterogeneous types of human labour by reducing all labour to a homogeneous unit of simple labour, but this is an insolvable aggregation problem.

In short, this is a major reason why the whole concept of homogeneous socially necessary labour time in volume 1 of Capital cannot even get off the ground.

BIBLIOGRAPHY
Böhm-Bawerk, Eugen von. 1949 [1896]. “Karl Marx and the Close of His System,” in Paul. M. Sweezy (ed.), Karl Marx and the Close of His System and Böhm-Bawerk’s Criticism of Marx. August M. Kelley, New York. 3–120.

Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.

14 comments:

  1. This is correct: Marx faces the problem of reducing all heterogeneous human labour to a homogeneous abstract socially necessary labour time unit, but does not properly explain how this happens.

    Marx addresses the distinction between concrete and abstract labor early in his book. The heterogeneity does not matter because that is the consideration of labor in its concrete form; the capitalist is concerned with labor in its abstract form -- i.e., what they quantify in their books in the quest for profits. One does not pay a bricklayer with a different currency than a surgeon; in capitalist accounts, everyone is reduced to a common unit, at different rates determined by various market factors. In short, capitalists do it.

    It's one of the more straightforward empirical remarks in the book; hence "experience shows." Can you show otherwise?

    Note that such an argument only works if commodities tend to exchange at their true labour values.

    I've seen you assert this before, but I'm not sure you ever explained why it is your contention. Could you elaborate?

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    Replies
    1. (1) "the capitalist is concerned with labor in its abstract form -- i.e., what they quantify in their books in the quest for profits."

      And Marx also said explicitly that you need to reduce all labour to a homogeneous socially necessary labour time unit:

      "Some people might think that if the value of a commodity
      is determined by the quantity of labour spent on it, the more
      idle and unskilful the labourer, the more valuable would his commodity be, because more time would be required in its production. The labour, however, that forms the substance of value, is homogeneous human labour, expenditure of one uniform labour-power. The total labour-power of society, which is embodied in the sum total of the values of all commodities
      produced by that society, counts here as one homogeneous mass of human labour-power, composed though it be of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour-power of society, and takes effect as such;
      (Marx 1906: 45–46)

      The whole empirical relevance of SNLT depends on being able to do this: showing how to reduce all heterogeneous human labour to a homogenous unit.

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    2. " One does not pay a bricklayer with a different currency than a surgeon; in capitalist accounts, everyone is reduced to a common unit,"

      Correct: a money unit, but if commodity prices do not reflect true labour values, then you cannot measure the true value of skilled labour by looking at the exchange values of the products of skilled labour as against unskilled labour.

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    3. And Marx also said explicitly that you need to reduce all labour to a homogeneous socially necessary labour time unit:

      Right. And this is simple enough to do with aggregate statistics. In BEA data alone, for example, we can find aggregates of wage-hours with sectoral considerations and other key stats.

      So what's the problem?

      if commodity prices do not reflect true labour values, then you cannot measure the true value of skilled labour by looking at the exchange values of the products of skilled labour as against unskilled labour.

      Again, one can easily do so with reference to aggregate stats. I even spelled out a concrete formula to find an individual commodity's value some time ago. Remember?

      All of these concerns are answerable by real, available data.

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    4. "In BEA data alone, for example, we can find aggregates of wage-hours with sectoral considerations and other key stats."

      lol.. and that doesn't show you how all heterogeneous labour can be reduced to a homogeneous socially necessary labour time unit, but only total hours worked in each sector or total wages in each sector.

      That doesn't tell you how many simple hours of SNLT occur in a day of work by a psychiatrist as compared with a bricklayer. Stop wasting my time.

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    5. Heterogeneous labor is not "reduced to" homogenous labor; they're two different aspects of the same thing. If you can't come to terms with the concrete/abstract distinction, then it's no wonder Marx seems nonsensical to you. That's why you seem to be looking for something "magical" that simply isn't there.

      So, stop wasting your own time.

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    6. The level of your stupidity and incoherence is beyond belief: you began above by saying that Marx makes the distinction between concrete and abstract labour (correct).

      A homogeneous socially necessary labour unit of simple labour is **abstract**. All labour must be measured by the latter. But then you want to say that mere BEA stats on **concrete** labour hours worked in different industries solves the aggregation problem, even though it blatantly doesn't -- and obviously data on actual hours worked in any given industry must refer to concrete labour, not abstract labour.

      How stupid are you, you Marxist crackpot idiot? Clearly all those years of being in your Marxist cult turned your brain to mush.

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    7. I can always tell for certain we've found yet another major weakness of your reading when you stop publishing my responses.

      In this case, your understanding of abstract labor alone is so badly botched as to undermine your entire version of Marxian theory. It's far from the only such point, but it's nice to keep a log of these as we go.

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    8. Your comments won't be published here when they are clearly those of an idiot liar and troll.

      **You** are the one who demonstrates that you do not understand the difference between Marx's concept of concrete and abstract labour.

      In response to the demand that you show how to reduce all heterogeneous labour to a homogenous labour time unit, you refer to the raw **concrete** hours worked in BEA stats. Idiot.

      Go back to spinning insane apologetics for mass murdering lunatics like Lenin, Trotsky and Stalin.

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    9. National aggregate measures of labor hours CANNOT be concrete, you prevaricating nincompoop!

      You're absolutely the most despicable person I've ever encountered online. Your blog is grotesque wet garbage. An absolute affront to science, to ethics, and to humanity itself.

      But at least you've started to wear your fascist leanings openly enough that others are noticing as well.

      Go jump in front of a bus.

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    10. (1) National aggregates of labour hours worked aggregate concrete labour hours in heterogeneous industries and so therefore are nothing but an aggregate of concrete labour hours. QED.

      (2) "But at least you've started to wear your fascist leanings "

      lol.. I'm sure in your insane world everyone who isn't a Marxist is a "fascist". No doubt as a Marxist you dream of the day you can abolish democracy and impose a totalitarian state on your helpless victims. How many gulags would like in your communist paradise? How many millions would die in your communist state?

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    11. Oh, and you still haven't refuted:

      (1) the fact that Marx was a metallist and he was wrong.

      (2) that the theory of value in vol.1 contradicts that in vol. 3.

      (3) that as the working day is stable or falling, and real wages are rising the rate of exploitation is falling, so that even in the 11840s to 1910s period capitalism had a tendency to decrease the rate of exploitation.

      (4) that Marx's predictions here have been totally refuted:

      http://socialdemocracy21stcentury.blogspot.com/2015/12/the-failed-end-of-capitalism-prediction.html
      ------
      No doubt all these catastrophic mistakes by Marx make you very angry, since you think Marx never made an error of any kind. lol.

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  2. "I've seen you assert this before, but I'm not sure you ever explained why it is your contention. "

    It follows directly and logically from Marx's own statements, you bloody stupid Marxist idiot.

    Marx states in Chapter 1 that it is possible to accurately measure the value of skilled labour by looking at the exchange values of products of skilled labour as against products of unskilled labour (Marx 1906: 51–52), but that **makes no sense** unless Marx really believes that commodities tend to exchange at pure labour values, because logically you cannot accurately measure the value of skilled labour in this manner if commodity prices almost always deviate from true labour values (which is of course Marx's view of prices in vol. 3 of Capital: prices deviate from labour values).

    You've lost. Stop wasting my time.

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