[Note--I believe I sent this to John Hull instead of to the list. I apologize. If it's already been posted, my apologies for the duplication as well]
I think they're operating on the same variant of the labor theory of value that inspired the labor note systems of the Owenites and Josiah Warren.
One of the best critics of this variant, believe it or not, was Karl Marx. According to Marx, the law of value worked *through* the market price system, and depended on it for its realization. It was only through the feedback of prices that the producer could determine whether his labor was socially necessary; it was only through the entry and exit of market actors, in response to price signals, that price was caused to approximate labor-value. The labor theories of both Marx and Ricardo did not merely implicitly assume price fluctuation, but depended on it. It was only through the process of competition over time, and the response of suppliers and buyers to the fluctuating market price, that continually caused equilibrium price to gravitate around labor value. And Marx said as much explicitly.
Marx and Engels were in complete agreement with the classical political economists on the role of competition in regulating the law of value. Engels, in his Preface to Marx's Poverty of Philosophy, ridiculed the utopian socialist notion of making labor the basis of a medium of exchange. The market forces of supply and demand were needed to inform the producer of the social demand for his product, and to establish the normal amount of social labor necessary for the production of a given commodity. So the deviation of price from value at any given time was not a violation of the law of value, but its driving mechanism:
"In modern capitalist society each industrial capitalist produces on his own account what he likes, how he likes, and as much as he likes. The quantity socially demanded is for him an unknown magnitude, and he does not know the quality of objects demanded any more than their quantity.... Ultimately demand is satisfied in some fashion, ill or well, and generally production is definitely regulated by the objects demanded. How is the reconciliation of this contradiction effected? By competition. And how does that arrive at this solution? Simply by depreciating below their labor value the commodities which are by reason of their quality or quantity useless or unnecessary, ...and in making the producers feel, ...that they have manufactured articles absolutely useless or unnecessary, or that they have manufactured a superfluity of otherwise useful articles. From that two things follow:
"First, the continual deviation of the price of commodities in relation to the value of commodities is the necessary condition by which alone the value of commodities can exist. It is only by the fluctuations of competition, and following that, of the price of commodities, that the law of value realizes itself in the production of commodities and that the determination of value by the labor time socially necessary becomes a reality.... In a society of producers of exchangeable commodities, to wish to determine value by labor time by interdicting competition from establishing this determination of value in the simple form by which it can do this--in influencing its price, is to show, at least in this connection, the habitual utopian misunderstanding of economic laws...."
It was only by the market price system, and its laws of supply and demand, that "the production of isolated producers [was] accomodated to the total social demand...."
Marx made very much the same argument in the main body of The Poverty of Philosophy: it was market price that signalled the producer how much to produce, and thus regulated price according to the law of value.
"It is not the sale of any product whatever at the price of its cost of production which constitutes the "relation of proportion" of supply and demand, or the proportional quota of this product relatively to the whole of production; it is the variations of demand and supply which fix for the producer the quantity in which it is necessary to produce a given product in order to get in exchange at least the cost of production. And as these variations are continued, there is also a continual movement of withdrawal and of application of capitals with regard to the different branches of industry....
"....Competition realises the law according to which the relative value of a product is determined by the labor time necessary to produce it."
Neither the classicals nor Marx, however, were very clear on *why* labor should create exchange-value: the subjective disutility of labor for the laborer. A lump of coal does not have to be persuaded to bring its services to market, by being offered a price that (in its estimation) makes it worth while. A laborer does.
I have dealt with these issues fairly intensively in the (very rough) draft chapters of Mutualist Economics at
>From: john hull <[EMAIL PROTECTED]>
Reply-To: john hull <[EMAIL PROTECTED]> To: [EMAIL PROTECTED] Subject: How do I convince New Agers that not everybody should get the same wage? Date: Tue, 13 Jan 2004 13:07:04 -0800
Since beautiful women make me stupid, and since I am a bit curious, I have become involved in a local currency project.
One reoccuring theme is that everybody should be paid the same wage for their labor. Doctor or bagboy, judge or record store clerk, the only fair way to do things is for everybody to get the same pay per hour. I fail to see the wisdom in this.
The sentiment seems to revolve around social justice: No person is worth any other, etc.
How would you suggest I argue otherwise. One option is to show that not everybody even values time equally, let alone an hour of effort. However, I'm not familiar with the research, if any, on that, and I get the impression that wages play a role in the estimation of time which would make my argument circular.
Alternatively, I could just say, "Do the math," and then say that people get paid what they bring in and try to impress them with a little calculus. I haven't really thought that one through too heavily.
Another option I thought of is to compare Spongebob Squarepants with Squidward Tentacles--the uberfry-cook vs. the surly cashier--to show how Spongebob adds armloads of revenue, whereas Squidward produces only minimally. Then I'd try to explain why it is fair for Spongebob to be paid more. I'm sure this will backfire when someone points out some plot device from some episode that will derail the whole affair.
What would you suggest? How can I demonstrate, in a relatively short period of time, that imposing equal wages isn't the best way to organize the world?
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