An open letter to Scott H. of MassLine.org on Marx’s value-analysis
Scott,
I really appreciate your efforts as an archivist. Nevertheless, I think that you’re badly mixed up about Marx’s theory of value in your posts here and here. You seem to simply ignore Marx’s claim that the value-analysis is an explanation of human social relationships, into which only humans can enter. This is a central point, but one that you seem to never acknowledge. Indeed, you repeatedly wonder why Marx says that machines cannot create value, as if he had not repeatedly said in the first chapter of Capital that value is a social relationship among people, not a natural relationship of people to things. It is as though you had criticized some person A for saying that democracy is basically a relationship between human beings by saying that voting machines and the physical locations of polling places matter, too, and therefore person A had failed to explain why voting machines are not participants in a democracy—it’s just self-evident that they are not participating in the same way that humans are, even if they have some role.
I’ll go into some more detail. As a preliminary, I should say that Steedman’s book, which you refer to as definitive without actually citing it or reproducing the argument, is based on a misunderstanding of Marx’s transformation tables. The “values” on the left-hand side of the transformation table are intended to be cost-prices, not values. With that change, the entirety of Steedman’s argument comes crashing down. See Fred Moseley’s book Money and Totality, or the appendix to Shane Mage’s dissertation. There is no serious conceptual proof given in Steedman; it’s purely algebraic and the algebra, though in itself correct, is based on a misunderstanding of Marx. Let’s set that aside because Moseley’s argument is extremely clear and he can argue the point better than I can in a short letter.
Next, I want to address your claim that machines can create surplus-value. First, I want to note that your retention of any language of value or labor is inconsistent with your analysis, so you should simply drop the language of value entirely. To say that a machine produces more value is nonsense from Marx’s point of view since he believes that value is by definition the representation of validly-social human labor in the form of the product of another human’s validly-social labor; value is the capitalist equivalent of someone receiving a work-credit or chit in a socialist society: a horse or an espresso-machine cannot receive a work-credit in a socialist society, and neither of those classes of non-human thing, nor any other non-human thing, is paid in capitalist society for its role in production. They do not engage in value relations. If you accept that this point is correct, as anybody should, then you can see why it is true to say that a machine literally cannot create human labor: because it is not a human with the right [0] of self-determination and obligations. It can work in a physiological sense, but it cannot labor in a way that will be recognized as human labor; that’s why we do not pay machines or animals or natural resources money for their (physiological) work. Let me try to make this point clear with an analogy. If you were to observe someone voting in an election or telling a friend “I love you”, you would see someone engaging in a social act and also expending physical energy in a particular way. Now, you could tell a computer voice program to tell someone “I love you” or program a machine to draw a check-mark on a piece of paper next to someone’s name, but it is obvious that the machine, though expending physical energy in the same way and at the same task, would not actually be expressing love or voting. [1] Those actions are not socially accepted as being the activity of human beings, even if it bears some resemblance to human activity. They’re cases of a machine imitating a human. That’s not a distinction that I or anyone else is coming up with from out of thin air; that it is a meaningful description of human society and the way that it works. Even if you choose to believe otherwise, it is a fact that society sees a difference.The physiological motion might be identical to that of a human, but the social meaning is totally different. Humans, just like any mammal, have certain relations that they share only among themselves; this is part of what it means to be a species.
When you give that long list in your follow-up letter to Frank S of reasons why human labor is not physiologically unique, concluding that labor surely therefore could not be the only source of surplus-value, you come so close to understanding this point, but you seem determined not to understand it. Let me again have recourse to an analogy: it is absolutely true that, for example, a wolf is no different from a lion in the sense that a lion and a wolf are capable of many, perhaps all, of the same sorts of physical activities. It might take some careful investigation to figure out just what makes them different, and they may have virtually the same set of skills or physical capabilities anyways. Is it then correct to argue that therefore there can be no difference between a lion and a wolf? Of course not, according not only to biologists, but also lions and wolves alike. It’s a sin of an extreme “naturalistic materialism”, of the sort which Marx rejected explicitly, to slur together these things simply because they are alike in some ways. By analogy, you forget that not only is it only humans who create surplus-value, but more importantly and more fundamentally, they are the only beings who can create value. Marx says that price is just an expression of a social relationship; humans are the only kind of creature who can engage directly in a social relationship. It’s just that simple; in fact, your understanding of this point lags behind those bourgeois economists who attribute to “human creativity” or “entrepreneurial drive” a central role in the economy; they at least understand that the economy is a social thing in which non-human things play only a mediating role. You simply obliterate the difference between people and machines and suggest that machines are capable, at present, of directly entering into social relationships as human beings. This is false. A machine, at present, does not engage in the process of receiving credit for participating in the social division of labor; nor does it want to; nor do people desire to so credit it. Assume a simple market society: when you buy a dowel rod from you neighbor, you pay her for her labor and the labor that went into her tools. You do not pay the tools. It’s just that simple.
Let’s go further and discuss your misconceptions around surplus-value. The above is somewhat polemical in that I am guessing that you would say that you also agree that human labor is different socially from non-human labor, although you do not correctly follow this difference to its conclusion (or else Marx’s argument about the sole source of surplus-value being human labor would immediately be apparent). Your misconception that machines can ever create value is the root error. But, you also make several separate, if related, errors in your analysis of surplus-value. These errors are actually things that you explicitly, rather than implicitly, communicate, so I would like to investigate these since this might appear fairer.
The second central mistake you make is the claim that Marx gave “no good answer to this question” of “[j]ust what is so special about direct human labor when it comes to creating surplus value”. I don’t mean to be rude, but you’re revealing your own unfamiliarity with the source texts here: it’s fine to say that you think Marx’s answer is wrong, but intellectual honesty demands that you at least acknowledge that he gave an answer and that you, if you are reviewing his work, reproduce it accurately. You sneer at people “who read their Marx years ago, and have long accepted Marx’s labor theory of value”, but you yourself do not bother actually giving an account of Marx’s argument and then giving a precise, clear criticism. You don’t even explicitly relay what Marx’s argument is! [2] Even worse, the version that you imply is Marx’s argument is a complete and utter misrepresentation; not a technical mistake or a terminological goof, but a true piece of misrepresentation.
You first suggest, as noted above, that someone might think that “this special property of human labor is due to some special characteristics of human beings themselves”, in the sense of their properties such as “intelligence, ingenuity, creativity”, before rejecting it. This is correct, but it also exactly Marx’s point. What allows human workers to create surplus-value is a social relation between them, not a special physiological property of humans as against other inputs into the production process.
But you also imply (albeit earlier in your argument) that what allows something to create surplus-value is the property of not-being-used-up in the production process, in other words, not being physically destroyed or transformed into some other physical substance after one round of production. You write: “Marx’s version of the LTV claims that only human labor can create surplus value (i.e., value beyond that which is used up in the production process)”. That you hold this conception is made clear when you write that “even the most simple tool may well [produce surplus-value] (assuming it is itself not invariably ‘used up’ (destroyed) in the production of each new commodity” and then go on to say that
[n]ot every commodity used in the production process can contribute to surplus value, however! The raw materials that go into the commodity being produced are used up in the process, and—as Marx said—only contribute as much value to the new commodity as is already incorporated into them. Raw materials, despite being commodities, do not contribute to surplus value” (my bolding).
Unfortunately, you completely fail to understand Marx in this regard and you confuse use-value with value. Use-values may be used up in the sense that it is completely obliterated when it is done being used; value is transferred and cannot be “used up” in this sense of being destroyed or dissipated (you seem to understand this in one place above but you also say above that surplus-value is only created if more value is “left over” than what is “used up”; this difference is absolutely essential). [3] Value does not disappear. What this means in more prosaic terms is that a capitalist charges for the input price of constant capital. The consumer pays that price; it is not that the price is “used up”, but the physical material of the constant capital. Value in Marx’s sense cannot be “used up”; [4] it can only be amortized, or transferred to the product and paid by the consumer. This is important to note because it is in this sense that constant capital is all the same, whether it consists of circulating or fixed capital (raw materials or machinery and other tools): both have their value transferred to the final product by workers, whether they are totally used up after one round of production or not. The only difference is the length of time which it takes to be transferred.
This leads us to the most flagrant mistake you make, which is that you say of Marx
[h]e is right in claiming that no more than the value embodied in the machine can be transferred to any single commodity produced with the machine, but he forgets here that the machine can be used over and over again to transfer a certain amount of value to each of a great number of output commodities
I have to be honest here: you simply do not know what Marx said about this. I don’t wish to be needlessly rude, but when you’re accusing someone “on your side” of a mistake that would be so truly child-like and idiotic, you should make sure that you have a firm ground to stand on. Marx clearly says that the cost of a machine (its value) is amortized over the total amount of commodities that can be produced using the machine over its lifetime, not amortized across a single, individual commodity only. This is detailed at length in Section Two of Chapter 15 of Capital. The fact that you say that you “haven’t looked up the passage [your]self” and therefore have not even double-checked (or possibly not even read) the material which you claim contains a truly idiotic mistake is evidence of sloppy scholarship. You are simply wrong about this textually. Marx does not say that the entire value of a machine is amortized across only a single commodity which can be produced with the machine, but the entire body of commodities which can be produced with the machine. It therefore cannot create surplus-value. The longer-lasting the machine, the more products over which its value is spread and the less value it contributes to each.
But let us finally discuss your theory’s implications, although the fact that you so badly misunderstand Marx’s own argument is already grounds for dismissing your criticism. First, let’s deal with some of the most immediate implications. Why, in your theory, would a capitalist who produces the machines which can create surplus-value not simply charge more for them, knowing that they are worth more than the value for which they are presently sold? There is only one social agent which cannot charge for the full value for the use of its commodity, which is workers. This is because workers are structurally-marginalized; they have no other options than to sell their commodity at the going rate. That is why workers can be a source of surplus-value. But why would machine-making capitalists be in the same position? You don’t even pose this (obvious) question, much less solve it.
Let’s also note that on your view, some odd results emerge if we consider the implication that a machine might end up adding more cost to the good than it entered the production process with (which is what it means to produce surplus-value). Let’s say that I have a lemonade stand and that I charge $50 for 100 large jugs of lemonade I made using an hour of labor at the going rate of $15 and $30 worth of raw materials; let’s assume that the $15/hour which I pay myself is not a reflection of all of the labor that goes into my production, and let’s say that I can sustainably charge, on top of that $45, $5 worth of “surplus” labor since the average rate of profit is around 11 percent (≈ 5/45)—effectively, I exploit myself at the rate of 33 percent (=5/15). Let’s say that the industry changes so that now all producers use a machine that lets them produce just as much lemonade with the same raw materials and only a third of the labor-time. Let’s say that the machine costs $14.99. So, according to Marx’s theory, I can now produce 100 jugs of lemonade ($30 of raw materials plus $5 of labor plus $14.99 of machine) for $49.99. The price has fallen, as has the rate of profit, assuming the rate of exploitation is the same. But, on this theory, the machine will be introduced by the “first mover” because it gave her a temporary super-profit; all producers must follow suit in order to remain competitive, even though the rate of profit overall falls. What does your theory say in regard to the same situation? I can’t tell how you think the rate of surplus-value on machines would be set, but let’s assume that in this case, at a minimum, the machine must produce in this scenario one unit of the smallest currency unit we have, so a penny on top of $14. In such a case, the price of the lemonade will fail to fall ($49.99 + 0.01 = $50, the price we started with), and if the machine rate of surplus value is anything larger than 0.01/14 (which is basically zero), then the price of the lemonade will actually rise over time, even though it has become cheaper to produce in terms of its cost. If a machine necessarily produces surplus-value because it allows us to reuse human labor, the producer can’t possibly charge anything less than what she charged before, even though her money-costs have fallen. But this would drive consumers away! Somebody working with the old machinery would actually make more money by selling at a more competitive price and the machine would fail to be introduced. Obviously, my example involves certain assumptions, but the point is that in the real world, the logic of the market would require producers to introduce the machine on my (and Marx’s) assumptions, but on your assumptions, the producer would fail to introduce it unless the machine actually did not add surplus-value (you might say that we should assume that the machine added less than 0.01 cents of surplus-value, but if it cannot be realized in price, it cannot be realized as surplus-value—you have to assume, at a minimum, that if someone produces surplus-value, they at least produce one cent of it, or else it is an economically fictional category). If what you’re saying is true, then capitalists would face a very strange set of incentives: they have an incentive to push down workers’ wages as far as possible (i.e., to raise the rate of surplus-value as much as possible for people) but they had better be careful in making sure that machines do not produce too much surplus-value or else the price of the good will actually rise (since the cost of a machine cannot be reduced, since it is what a capitalist paid for it, and that’s that).
In summary, you fail to understand that value is a social relationship among humans, just as is gender or feudalism. You incorrectly argue that Marx thinks that constant capital transfers all of its value to the product in one round of production, which simply and openly contradicts his own words. You mistakenly draw the inference, therefore, that machines are somehow capable of creating additional human labor, which is an overt category error. And, finally, your theory oddly predicts that capitalists would actually want to minimize the surplus-value that machines produce (because it might make a new production technique less cost-efficient than an old production technique), which contradicts what we know about capitalists. [5]
I appreciate the work that you do on your sites, but I wish you had read Marx more carefully and considered these points before posting such a lengthy set of articles.
— Seratsky, 15 July 2019.
[0] This is meant in the practical sense of “right”, not only in the juridical or legal sense.
[1] Let’s set aside your android hypothetical, since the existence of androids which are treated socially like human beings, with rights and all that, would be an entirely revolutionary stage in machines which we haven’t yet hit; your argument is just as much about the present and, indeed, the past, so it’s best not to complicate things—if your case doesn’t work without the android example, it fails on the level of generality which you operate. But the answer to your query is still very simple: if an android, or for that matter any animal or machine, were accepted by human society to be a person with rights and were also truly capable of acting, on their own, in the market, then yes, they could produce value. At that point, they are for all intents and purposes human.
[2] This argument is spelled out in Chapters Six and Seven of Capital (slightly poorer but acceptable translation found here) and in Value, Price, and Profit, Parts VI - X. The argument, in short, is that workers can live and reproduce if they are paid a certain amount of money x (that is, they consume some certain amount of the labor of one another) but are capable of working for a longer number of hours y. Since workers only have their labor-power to sell, they are compelled to sell it; like any market good, its average value is the labor-time contained in it (here assumed to be x), but capitalists may be able to force the workers to work for y hours. The difference y less x is surplus-value, which is the fundamental basis of profit.
[3] Although I should point out that the physical matter of raw materials also reappears in the form of the product or is dissipated into the atmosphere. In this sense, neither the value nor the physical matter of raw materials disappears in production.
[4] Although it might disappear because of market-changes (this is not the same thing as being used up, though).
[5] Compare this to Marx’s different point about the unwillingness of capitalists to introduce new techniques. Marx says that they will be unwilling because it will devalorize their old capital but that they will have to do so in order to remain cost-competitive. That is, Marx draws the inference that competition might force capitalists to engage in actions which lower their rate of profit in order to remain cost competitive. By contrast, you have capitalists in a competitive market who would be raising costs in order to be profitable—this is what monopolies do, but we are here abstracting from this problem.