The Labour Theory of Value and Animal Labour

Marx’s labour theory of value (LTV) in Volume 1 of Capital states that the exchange value of commodities is fundamentally caused by socially necessary labour time (SNLT). SNLT is supposed to be a cause of real world individual exchange values and prices. It is well known that there is a severe and blatant contradiction between volume 1 (1867) and volume 3 of Capital (1894). By volume 3 of Capital, Marx has retreated into a position on the relation between labour value and price where it only holds in a grossly unrealistic state where the profit rate is equalised and individual prices above or below labour values will cancel each other out in the aggregate to make the prices-equal-value equation hold.

But my comments below cut much deeper than complaints about the internally inconsistent and contradictory aspects of Marx’s work: they are a fundamental critique of the very conceptual coherence of Marx’s LTV and the idea of human SNLT.

In what follows, let us assume that the LTV is meant to be an empirical proposition and not some analytic statement (where it would true by definition, tautologous and empirically empty).

If the LTV is asserted as an empirical proposition, it seeks to explain empirically how the labour value in commodities is created.

I have already pointed to a fundamental problem identified by Piero Sraffa:

“There appears to be no objective difference between the labour of a wage earner and that of a slave; of a slave and of a horse; of a horse and of a machine, of a machine and of an element of nature (?this does not eat). It is a purely mystical conception that attributes to human labour a special gift of determining value. Does the capitalist entrepreneur, who is the real ‘subject’ of valuation and exchange, make a great difference whether he employs men or animals? Does the slave-owner?” (Sraffa, unpublished note, D3/12/9: 89, quoted in Kurz and Salvadori 2010: 199).

The fact is, as Sraffa notes, labour power in production is not limited to human beings: historically and to this day, animal labour was, and still is in developing nations, a fundamentally important source of labour power.

if Marx’s abstract socially-necessary labour time (SNLT) units were meaningful measures of every type of heterogeneous, concrete human labour, then many types of the labour performed by animals ought to be measurable in terms of SNLT units too, especially when human labour can be substituted for animal labour (e.g., horse mills could be replaced with mills where humans do the work, ploughs can be pulled by humans, and so could carts or carriages).

Why does a coherent, empirically grounded theory of labour value exclude animals? This is exactly the point that Piero Sraffa is raising in his criticisms of the labour theory of value.

And there many other questions too.

Marxists might complain that animals do not sell their labour and are owned by humans and are a type of capital good. But so what?

We could easily imagine a counterfactual situation in which large numbers of people in industrial economies do not sell their labour, are enslaved and worked to death to produce commodities, and treated as capital goods. Would the commodities produced by slave labour cease to have a SNLT value? If slave labour does still have a SNLT value, then it follows that even if people receive no wages and are owned as slaves, then this doesn’t change the fact that they produce labour value in commodities.

But we can say the same thing about animals: animals receive no wages either, so why does their labour not count as SNLT?

One could go on to argue that animals can’t speak or spend money, but one could easily imagine counterfactual situations in which humans are made to work without spending money or or never taught natural human language. Would their labour cease to create SNLT?

Finally, it is no good for Marxists to fall back on an analytic definition of the LTV, where it is just true by definition. I have no reason to accept an analytic definition I think is incoherent and not empirically relevant.

We can see here how the LTV has severe conceptual problems from the very beginning.

BIBLIOGRAPHY
Kurz, Heinz D. and Neri Salvadori. 2010. “Sraffa and the Labour Theory of Value: A Few Observations,” in John Vint et al. (eds.), Economic Theory and Economic Thought: Essays in Honour of Ian Steedman. Routledge, London and New York. 189–215.

More Mystical Labour Theory of Value Nonsense

It can be found in volume 1 of Marx’s Capital:

“The value of a commodity is certainly determined by the quantity of labour contained in it, but this quantity is itself socially determined. If the amount of labour-time socially necessary for the production of any commodity alters – and a given weight of cotton represents more labour after a bad harvest than after a good one – this reacts back on all the old commodities of the same type, because they are only individuals of the same species, and their value at any given time is measured by the labour socially necessary to produce them, i.e. by the labour necessary under the social conditions existing at the time.” (Marx 1982: 318).

In other words, what Marx is saying here is that when, say, 1000 abstract labour hours produce 1000 units of cotton, then the labour value of 1 unit of cotton would equal 1 abstract labour hour (how this labour value is mapped onto the “natural price” is never adequately explained by Marxists).

But if 1000 labour hours are expended on production but some natural disaster means only 200 units of cotton can be produced, then the labour value of 1 unit of cotton would now equal 5 abstract labour hours. The “natural price” corresponding to the labour value would rise too. Older and previously produced units of cotton would now fetch a price at this new labour value. This, for comrade Marx, explains why prices of agricultural goods rise when floods, droughts or other crop failures occur. Clearly, this is how Heinrich (2012: 43) interprets Marx.

As an explanation or even as a coherent theory, it is so patently absurd.

Why? The reason is that such an interpretation requires that abstract labour-power or abstract socially necessary labour time used in producing cotton has been magically or mystically transferred from the cotton crops that died or were destroyed into the ones that survived. It is even worse than the mystical nonsense about labour being objectified or materialised in commodities described here.

It is quite obvious that the labour expended in planting and maintaining crops that spoilt or were destroyed in some natural disaster was in vain. In retrospect, it was simply wasted labour. Wasted labour – whether concrete or abstract – cannot be some magical quantity that flows into the crops that survive.

Knut Wicksell, in an 1886 debate with the Marxist Atterdag Wermelin, made another criticism of this aspect of Marx: Wicksell pointed out that, when the price of cotton soars after bad harvests, it is the case that the amount of labour required to harvest the smaller crop can actually fall below that needed for a full crop, but this blatantly contradicts the labour theory of value (Lönnroth 1995: 104).

That is undoubtedly another devastating problem: just as Wicksell suggested, what if total abstract labour time for an industry-wide crop falls dramatically after a natural disaster early in the season such that unit labour values fall in relation to a good harvest, since considerably less labour is now needed to bring it to market (e.g., we know that for many crops picking and harvesting is very labour intensive). The labour theory of value requires that the natural price falls. We all know this doesn’t happen. In flexprice markets for agricultural goods not affected by commodity stabilisation programs, we all know the price would soar. It soars even though total labour time – whether concrete or abstract socially necessary labour time – would have fallen.

We see time and again the insuperable difficulties with and absurdities of the labour theory of value. I expect some Marxists in the comments section will tell me that no price ever corresponds to its labour value (in which case what is the use or explanatory power of this stupid theory at all?). Or I need to consult the right Marxist interpreting priest to understand the writings of the Master (though I did consult Heinrich 2012, but maybe he is just a plain heretic and doesn’t understand the Master’s work after all!!). Or maybe I need to read it in the original German. Or maybe I just need to take it on faith.

BIBLIOGRAPHY
Heinrich, Michael. 2012. An Introduction to the Three Volumes of Karl Marx’s Capital (trans. Alexander Locascio). Monthly Review Press, New York.

Lönnroth, Johan. 1995. “Swedish Model Market Socialism,” in Ian Steedman (ed.), Socialism and Marginalism in Economics 1870–1930. Routledge, London. 102–115.

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

The Foundation of Marx’s Labour Theory of Value in Ricardo

It can be seen in David Ricardo’s On the Principles of Political Economy and Taxation (3rd edn.; 1821):

“In making labour the foundation of the value of commodities, and the comparative quantity of labour which is necessary to their production, the rule which determines the respective quantities of goods which shall be given in exchange for each other, we must not be supposed to deny the accidental and temporary deviations of the actual or market price of commodities from this, their primary and natural price.

In the ordinary course of events, there is no commodity which continues for any length of time to be supplied precisely in that degree of abundance, which the wants and wishes of mankind require, and therefore there is none which is not subject to accidental and temporary variations of price.

It is only in consequence of such variations, that capital is apportioned precisely, in the requisite abundance and no more, to the production of the different commodities which happen to be in demand. With the rise or fall of price, profits are elevated above, or depressed below their general level, and capital is either encouraged to enter into, or is warned to depart from the particular employment in which the variation has taken place.

Whilst every man is free to employ his capital where he pleases, he will naturally seek for it that employment which is most advantageous; he will naturally be dissatisfied with a profit of 10 per cent., if by removing his capital he can obtain a profit of 15 per cent. This restless desire on the part of all the employers of stock, to quit a less profitable for a more advantageous business, has a strong tendency to equalize the rate of profits of all, or to fix them in such proportions, as may in the estimation of the parties, compensate for any advantage which one may have, or may appear to have over the other.” (Ricardo 1821: 80–81).

Ricardo refers to the “comparative quantity of labour” necessary for production as a foundation of the value of commodities. There is a “primary and natural price” at which exchange value or price somehow equals the “comparative quantity of labour.” But how this happens and how the quantity of labour maps onto, or corresponds to, natural price is left unexplained.

How, for example, do equal labour quantities determine equal prices when there are, and have always been, such radical differences in wage rates by sector, profession, skill, experience, privilege or competence? For if, at the natural price, equal labour quantities do not cause equal prices, how can anyone take the labour theory seriously? I don’t think Marx ever adequately explained this either.

Ricardo is also clear that market prices are driven away from “natural prices” because of supply and demand discrepancies in production. As those individual market supply or demand disequilibria are eliminated, prices move back towards “natural prices” in a type of equilibrium process.

But, as in Marx, the Ricardian labour theory of value is ill-defined and under-determined. How do you properly define the “comparative quantity of labour which is necessary” for production as a homogeneous unit that can function as a universal measure of the labour value of all commodities?

BIBLIOGRAPHY
Ricardo, David. 1821. On the Principles of Political Economy and Taxation (3rd edn.). John Murray, London.