Labour as fundamental to economic value.

I’ve written a great deal about STV (Subjective Theory of Value, the theory of value used in capitalism), why it is logically absurd and leads to nonsense. Some people have noted to me that I have not really discussed the arguments for LTV in much detail, which is a fair statement.

The reason why I have not really addressed this is because I’ve never gotten that far with STV proponents. When I argue with them about reality being what it is regardless of our desires, they say things like “yes, I agree with that, but the worth of an object is the one thing in the universe that is based on our desires.” They then keep vehemently claiming that reality is what it is AND that the worth of an object is the one exception to that absolute rule. I simply give up when I realize that the person I’m talking to simply will never get out of that contradiction: the indoctrination has taken effect all too well.

This is also why this entry is NOT addressed to the proponents of STV, not because I don’t expect them to agree with it, but because I am not willing to take the debate beyond that. I am not willing to debate people who believe in magic. I know this is rather harsh, but that’s how I see it. That being said, it is relevant for people who are interested in LTV to discuss the basis for LTV.

In order for LTV to be true, it must be the case that labour is fundamental to the concept of economic value (that is to say, the prices of products). How can this be demonstrated?

First, we have to look at what a price is composed of. We can roughly say that a price has three parts: raw materials/capital/tools, wages, and surplus (profits and other forms of usury, taxes, and so on).

But all three categories are reducible to labour. This is more obvious in the case of wages, which is the result of labour, and surplus, which is the rest of the production which was not given back to the workers, therefore also the result of labour. As for the raw materials, they are all ultimately broken down into labour by the same process. The cost of a given material is reducible to the labour it took to make it, plus the remaining cost of the raw materials used to make that, and so on and so forth.

To put some numbers on this, assume that the repartition of costs is something like 30% wages, 20% surplus and 50% raw materials/capital/tools. Now take any raw material or tool used: for the sake of simplification, suppose that a given business only uses screwdrivers, which is made of steel wire, plastic, nickel, and chromium. The cost of the screwdrivers is therefore reducible to the labour used to make steel wire, plastic, nickel, and chromium, plus the raw materials used to make all of these. The 50% that was not explained by labour is therefore lowered to 25%, this representing the raw materials used to make the steel wire, plastic, nickel, and chromium. The businesses that made these things can do their own calculations, just as we did, which lowers our own unaccounted percentage to 12.5%, then 6.25%, and so on. If we keep going in this manner, we will find that ultimately everything can be reduced to some form of labour.

The inescapable conclusion is that price (and by extension economic value) is in fact solely composed of labour. The fact that prices are extremely variable is a result of the surplus value being variably appropriated by the ownership class (composed of business and government ownership, and enforced as profits, taxes, rent, and interest rates, as well as the indirect effects of a great number of laws); without capitalist privileges, surplus would be essentially non-existent and prices would be inexorably driven towards cost (labour+raw materials/capital/tools)

Muddling the issue is the fact that the prices of labour and the raw materials/capital/tools are subjectively established under our STV system. This is what pushes STV proponents to argue that “STV must be correct because that’s how prices are determined.” As I’ve pointed out, this is a circular argument: you can’t use the fact that we live under an STV system to prove that STV is valid, any more than a Christian is allowed to prove that God exists by arguing that we live in theistic societies. But the impulse remains obvious nevertheless.

At any rate, we can make the same exact calculation under an LTV system and arrive at the same conclusion that prices are reducible to labour; the same 50%-25%-12.5%-6.25%… sequence will logically obtain, the main difference being that there is theoretically no surplus and therefore a clean 50%/50% division.

We can now answer the question: what is the most important factor in determining economic value? This factor, in fact the only factor, is labour.

STV proponents usually reply that this position is contradicted by the fact that customers can still choose to buy or not buy any given product, and that an object which is unwanted cannot be a product. They say that this introduction of subjectivity proves that labour is not the whole story after all.

Let’s start with a simple example, in fact the example that capitalists always use to try to refute LTV, the mudpies. A person digs out mudpiles and then puts them back in the ground, over and over, spending so many hours of labour. And yet no one wants to pay him for doing this. Does this prove that labour alone is not the whole story?

But in saying so, we are confusing personal preference and economic value. Labour is still the whole story insofar as economic value goes; if people actually were buying the “service,” they would still have to pay in accordance with the labour expanded. But no one prefers to consume this “service,” and therefore the issue of economic value does not even enter the picture. This therefore proves nothing about economic value at all.

Here is another numbered example to illustrate the issue. Suppose that Tremblay Motors is producing small cars at a pace of 30 person-hours per car, and all the other inputs cost 120 person-hours per car. This means that a Tremblay, according to LTV, can be sold at a price of up to 150 person-hours, or whatever equivalent currency this amounts to.

Now, assume that a capitalist firm tries to sell a Tremblay knockoff for 800 person-hours (which is about the equivalent of a 12000$ car), while everyone else is selling them at 150 person-hours. Obviously they would fail and would have to dramatically lower their prices, simply because no one would buy at such over-inflated prices.

Does this prove that the labour of the workers in the capitalist firm is not the sole determinant of the economic value? No, not at all. In fact, as I’ve pointed out before, profit (like all surplus value) also originates in labour. This surplus of 650 person-hours per car is stolen from the workers and from the consumers. This price of 800 person-hours is a theft and a lie told by profiteers, pure and simple. It can therefore not be a reflection of actual economic value, any more than stealing someone else’s car proves that the car has no economic value.

I believe that, by these examples, I have amply defeated the point. The fact that people decide what is and is not a product does not introduce subjectivity in economic value.

Now imagine the post-scarcity scenario of a far future where factories are entirely automated and self-repairing. No human labour is necessary to produce any of the goods that man consumes on a daily basis. Since no work is necessary, no one makes any wage, or could make any wage. Obviously products must be shared, since no one can buy them; it would be absurd to maintain trading conditions in such a scenario. Price, and economic value, are then set to zero, and the absence of labour implies the absence of economic value.

This is merely the flip side of the first argument I discussed. In that argument, I showed how economic value can be reduced to the presence of labour. In this one, I show that the absence of labour entails the absence of economic value. Since economic value is nothing but the expression of labour in an exchange setting, this equation should not be surprising.

20 thoughts on “Labour as fundamental to economic value.

  1. James June 13, 2010 at 12:11

    “When I argue with them about reality being what it is regardless of our desires, they say things like “yes, I agree with that, but the worth of an object is the one thing in the universe that is based on our desires.” They then keep vehemently claiming that reality is what it is AND that the worth of an object is the one exception to that absolute rule.”

    Unless our desires are not part of reality there is no contradiction. You continually bring this example up but you haven’t addressed any responses to it. Here’s a couple

    1) Our opinion of something IS a fact about that object
    2) Abstract concepts are a product of our mind

    “But all three categories are reducible to labour.”

    What about land?

    “As I’ve pointed out, this is a circular argument: you can’t use the fact that we live under an STV system to prove that STV is valid”

    Again you ignore all responses to this argument you have recieved in previous debates. If value theory is descriptive not prescriptive then you can’t have an STV or LTV system. Both theories are attempts to explain how prices are determined not to create rules as to how they ought to be determined.

    “Labour is still the whole story insofar as economic value goes; if people actually were buying the “service,” they would still have to pay in accordance with the labour expanded. But no one prefers to consume this “service,” and therefore the issue of economic value does not even enter the picture. This therefore proves nothing about economic value at all.”

    Not quite. No one prefers to consume this service *at this price* but if the price fell that might change.

    “This surplus of 650 person-hours per car is stolen from the workers and from the consumers. This price of 800 person-hours is a theft and a lie told by profiteers, pure and simple. It can therefore not be a reflection of actual economic value, any more than stealing someone else’s car proves that the car has no economic value.”

    Calling a price above labour cost “theft” only works if you’ve already proved that labour is the proper measure of price (which is sneaking normativity into the discussion) so can’t rely on this as a counter-argument. Here’s another example. The equilibrium price rises from 150 person-hours to 300, why?

    “Now imagine the post-scarcity scenario of a far future where factories are entirely automated and self-repairing. No human labour is necessary to produce any of the goods that man consumes on a daily basis. Since no work is necessary, no one makes any wage, or could make any wage. Obviously products must be shared, since no one can buy them; it would be absurd to maintain trading conditions in such a scenario. Price, and economic value, are then set to zero, and the absence of labour implies the absence of economic value.”

    Again, not quite. Products would no longer be scarce in relation to demand so STV would predict all prices falling to zero as well. At best this proves that LTV isn’t complete nonsense but it doesnt show why its a good theory or why STV is a bad one.

  2. Francois Tremblay June 13, 2010 at 15:45

    “1) Our opinion of something IS a fact about that object”

    It’s a relational property, at best.

    “2) Abstract concepts are a product of our mind”

    Yes…?

    “What about land?”

    According to LTV, land does not have exchange value because it is not a product. Therefore it does not count.

    “Again you ignore all responses to this argument you have recieved in previous debates. If value theory is descriptive not prescriptive then you can’t have an STV or LTV system. ”

    Actually, this is the first time I hear this argument, so, not sure where you got his information. That being said, yes, I do agree that I created some confusion as regards to whether I was talking descriptively or prescriptively.

    “Not quite. No one prefers to consume this service *at this price* but if the price fell that might change.”

    The sole role of market exchange, as regards to value, is to confirm or deny that the work that went into the commodity was socially necessary.

    “Calling a price above labour cost “theft” only works if you’ve already proved that labour is the proper measure of price (which is sneaking normativity into the discussion) so can’t rely on this as a counter-argument.”

    Saying that something is theft has no connection with the value we put on it, so, not sure what the connection is here. It’s an ownership issue not a value issue.

    “Here’s another example. The equilibrium price rises from 150 person-hours to 300, why?”

    How am I supposed to guess that? You’ve given me no information about the scenario.

    “Again, not quite. Products would no longer be scarce in relation to demand so STV would predict all prices falling to zero as well.”

    Uh, what? We don’t even know if products are scarce NOW. So how can you draw this conclusion?

  3. James June 14, 2010 at 13:39

    “It’s a relational property, at best.”

    Yes but it’s still a fact about reality so you can’t argue that STV proponents are trying to deny that reality and facts exist. Why can’t an object’s economic value exist as a relational property?

    “Yes…?”

    Well…so much for facts about reality having to exist inherently in an object…

    “According to LTV, land does not have exchange value because it is not a product. Therefore it does not count.”

    But land can be and is exchanged and LTV can’t explain these prices. Also land is a product once someone has developed it but some of the value it sells at will have nothing to do with the labour that went into it.

    However my point was that the catagories are reducible to land as well. Nothing can be produced without the cooperation of land either.

    “Actually, this is the first time I hear this argument, so, not sure where you got his information. That being said, yes, I do agree that I created some confusion as regards to whether I was talking descriptively or prescriptively.”

    Well I got the information from being in a debate with you on FLL. Anyway, are you talking descriptively or prescriptively?

    “The sole role of market exchange, as regards to value, is to confirm or deny that the work that went into the commodity was socially necessary.”

    Isn’t this question begging? Regardless it doesn’t actually contradict what I said. People will prefer a product or service more when its at a lower price so it isn’t true that if people were buying it they would be buying it at the labour price.

    “Saying that something is theft has no connection with the value we put on it, so, not sure what the connection is here. It’s an ownership issue not a value issue.”

    Well that contradicts “This price of 800 person-hours is a theft…It can therefore not be a reflection of actual economic value, any more than stealing someone else’s car proves that the car has no economic value”. I don’t know what the connection is either, that was my point.

    “How am I supposed to guess that? You’ve given me no information about the scenario.”

    LTV should be able to explain why prices move the way they do. STV can answer the question without any more information.

    If labour value is inherent in an object then it’s pretty difficult to explain how an equilibrium price could change.

    “Uh, what? We don’t even know if products are scarce NOW. So how can you draw this conclusion?”

    I would argue that we do but this is irrelevant. STV can also explain why prices would fall to zero in your scenario so it’s not an argument in favour of either theory.

  4. Francois Tremblay June 14, 2010 at 15:45

    “Why can’t an object’s economic value exist as a relational property?”

    Well, that’s the issue under debate isn’t it? STVers claim that economic value is solely subjective, while LTVers argue against that proposition.

    “Well…so much for facts about reality having to exist inherently in an object…”

    What? That doesn’t make sense. “Facts” do not exist “in an object”… I think you mean “properties.” The fact that human beings discover a concept does not mean that the concept is dependent on human beings. The concept of gravity is in the human mind, but gravity itself is not dependent on human beings.

    “However my point was that the catagories are reducible to land as well. Nothing can be produced without the cooperation of land either.”

    I don’t think you understand the difference between “necessary” and “reducible.” Land is necessary but value cannot be reduced to land alone. The only thing which value can be reduced to entirely is labor.

    “Anyway, are you talking descriptively or prescriptively?”

    Right now and in the context of this entry, descriptively.

    “People will prefer a product or service more when its at a lower price so it isn’t true that if people were buying it they would be buying it at the labour price.”

    No idea why you think this is a contradiction. Part of the tendency towards labor prices is precisely the desire of everyone to lower the price they have to pay. Kevin Carson already established this.

    “Well that contradicts “This price of 800 person-hours is a theft…It can therefore not be a reflection of actual economic value, any more than stealing someone else’s car proves that the car has no economic value”. I don’t know what the connection is either, that was my point.”

    You don’t see the connection between something being theft and it having no relevance to economic value? Economic value by definition is about exchange. Theft is not an exchange.

    “LTV should be able to explain why prices move the way they do. STV can answer the question without any more information. ”

    If it can answer such a vague scenario, STV must be too vague to be useful. But actually, it cannot answer such a vague scenario. There are dozens of possible reasons why price would go up in a capitalist world.

    “If labour value is inherent in an object then it’s pretty difficult to explain how an equilibrium price could change.”

    It’s not “difficult,” it merely requires some knowledge of the context. Just saying “price went up” doesn’t tell us anything except what men in suits decided a tag should say. It doesn’t tell us anything about why they took that decision.

    Actually, we do know one thing: it has something to do with profit. But once again, that’s too vague to be useful.

    “I would argue that we do but this is irrelevant.”

    No you don’t.

    “STV can also explain why prices would fall to zero in your scenario so it’s not an argument in favour of either theory.”

    My point was that YOU DON’T KNOW THAT. You claim that STV does not put prices on scarce goods, but you don’t even know if any goods we have right now are scarce, so you have no inductive data to draw that conclusion. You merely assume that STV necessarily implies that prices would fall to zero.

    I would counter that with the fact that it has always been true that, were the means of production in a given society harnessed to fulfill human needs instead of profit, a much smaller quantity of human labor would be required to fulfill basic human needs (good food, clothes, lodging) in that society. Many Anarchists and Communists have argued that scarcity in those basic goods is manufactured by the capitalist structure, and that there is in fact “enough and as good” available to all. Since this has been going on for more than a century, there’s no a priori reason to believe that this will cease at some arbitrary point.

  5. Dmyri Kleiner June 15, 2010 at 08:06

    LTV vs STV is just an equivocation between flows and stocks, between value and price. STV is a fine way to understand the price of any given stock of goods, but for a given stock to be replenished you can no go below it’s reproduction costs, and since neither land nor capital, the actual factors, not classes that earn income by title to them, are not living beings with agency, a little value when not applied to production by labour, what is needed to replenish a stock is labour, and there the source of value is labour.

  6. James June 16, 2010 at 09:02

    “Well, that’s the issue under debate isn’t it?”

    Exactly, so you can’t argue that STV is false because implies that desires change reality until you have shown how value is inherent in an object. If you can do that then the “desires vs reality” argument is becomes redundant.

    “That doesn’t make sense. “Facts” do not exist “in an object””

    Sorry, I did mean to say properties.

    “The fact that human beings discover a concept does not mean that the concept is dependent on human beings.”

    No but a concept that was invented by humans would be.

    “I don’t think you understand the difference between “necessary” and “reducible.” Land is necessary but value cannot be reduced to land alone. The only thing which value can be reduced to entirely is labor.”

    But your argument for this is that “The cost of a given material is reducible to the labour it took to make it, plus the remaining cost of the raw materials used to make that, and so on and so forth.” which isn’t true. The cost of making something is reducible to whatever made it then some of the cost will be due to land as well.

    “No idea why you think this is a contradiction. Part of the tendency towards labor prices is precisely the desire of everyone to lower the price they have to pay. Kevin Carson already established this.”

    The tendancy he describes does exist, more or less, but it only applies to final prices and under a certain condition, that the marginal seller feels the same or a very similar disutility as the atleast one of the other sellers, so a contradiction isn’t neccessary but it is possible. If the disutility of one of the sellers falls then it’s possible for both the price to fall and to be higher than labour cost.

    “If it can answer such a vague scenario, STV must be too vague to be useful. But actually, it cannot answer such a vague scenario. There are dozens of possible reasons why price would go up in a capitalist world.”

    It doesn’t follow that if a theory can explain something vague then it can’t explain something more complex. There are a number of things that would cause a price to rise but they all reduce to “an increase of scarcity in relation to demands”.
    I’ll flesh out the example a bit more though.

    The labour cost of the car is 150 person-hours so LTV should predict that the final price will be the same. However prices change a lot along the way and rarely, if ever, settle at the final price so a value theory needs to explain all these other prices too. If your counter-argument is to dismiss them as theft then it’s a little circular because it assumes we already know labour determines an objects proper value.

    “My point was that YOU DON’T KNOW THAT. You claim that STV does not put prices on scarce goods, but you don’t even know if any goods we have right now are scarce, so you have no inductive data to draw that conclusion. You merely assume that STV necessarily implies that prices would fall to zero.”

    I don’t merely assume anything. I don’t think empirical data is required to prove a theory correct or that it’s well suited for economics. I take a more rationalistic approach so I would require a theory to interpret the data rather than the other way round.

    “Many Anarchists and Communists have argued that scarcity in those basic goods is manufactured by the capitalist structure, and that there is in fact “enough and as good” available to all.”

    I can agree with those arguments but wouldn’t that be an example of artificial scarcity rather than no scarcity?

    “STV is a fine way to understand the price of any given stock of goods, but for a given stock to be replenished you can no go below it’s reproduction costs, and since neither land nor capital, the actual factors, not classes that earn income by title to them, are not living beings with agency, a little value when not applied to production by labour, what is needed to replenish a stock is labour, and there the source of value is labour.”

    Labour is also of little value without capital and no value without land so i’m not convinced. Also why is agency required for creating value? Even if it why can’t the owners of the other factors contribute value via their property rather than their labour?

    I agree that a cost theory of value can explain final prices which seems to be what you’re getting at here, though for reasons explained above I think even then an LTV requires special conditions, but it can only explain these whereas STV can explain both.

  7. Francois Tremblay June 16, 2010 at 14:52

    “Exactly, so you can’t argue that STV is false because implies that desires change reality until you have shown how value is inherent in an object.”

    That is daft reasoning. In no other field of human knowledge do we assume that desires change reality as a default. And you are only confirming my initial point, which is that STVers are trying to reject reality.

    “Sorry, I did mean to say properties.”

    Your sentence still doesn’t make sense.

    “No but a concept that was invented by humans would be.”

    Yes, what of it? Under just price theory, people didn’t believe they were “inventing” value, they thought they were “discovering” value. They weren’t making things up.

    “But your argument for this is that “The cost of a given material is reducible to the labour it took to make it, plus the remaining cost of the raw materials used to make that, and so on and so forth.” which isn’t true. The cost of making something is reducible to whatever made it then some of the cost will be due to land as well.”

    You mean the buildings? Those are also reducible to the labor it took to make them. Same as any other product.

    “The tendancy he describes does exist, more or less, but it only applies to final prices and under a certain condition, that the marginal seller feels the same or a very similar disutility as the atleast one of the other sellers, so a contradiction isn’t neccessary but it is possible. If the disutility of one of the sellers falls then it’s possible for both the price to fall and to be higher than labour cost.”

    Yes, cost is a price-attractor but price does not necessarily follow it to the letter. In a capitalist system, there will always be fluctuations due to power disparities, for instance (for an extreme example of that, see the glass of water in the desert).

    “The labour cost of the car is 150 person-hours so LTV should predict that the final price will be the same. However prices change a lot along the way and rarely, if ever, settle at the final price so a value theory needs to explain all these other prices too. If your counter-argument is to dismiss them as theft then it’s a little circular because it assumes we already know labour determines an objects proper value.”

    Well, my assertion that usury is theft is not derived from STV. It’s an entirely different issue. Yes, of course I’d say that profit is theft and the result of power disparities.

    “I don’t merely assume anything. I don’t think empirical data is required to prove a theory correct or that it’s well suited for economics. I take a more rationalistic approach so I would require a theory to interpret the data rather than the other way round.”

    That’s fine, you are free to use any method you want, but you haven’t proven anything about scarcity.

    “I can agree with those arguments but wouldn’t that be an example of artificial scarcity rather than no scarcity?”

    The point is: how do you know that any “non-scarcity” situation can’t be turned into profit-seeking and rent-seeking by capitalist profiteers, if this is what we have RIGHT NOW?

  8. James June 18, 2010 at 13:03

    “That is daft reasoning. In no other field of human knowledge do we assume that desires change reality as a default. And you are only confirming my initial point, which is that STVers are trying to reject reality.”

    Yes we do, when we are studying the reality of those changing desires. I’m not sure how you drew the conclusion that I’m trying to deny reality, though i’m beginning to think this is hopeless, since I *explicitly* stated that i’m arguing value is a relational property.

    “Yes, what of it? Under just price theory, people didn’t believe they were “inventing” value, they thought they were “discovering” value.”

    So what? Because some group of people thought something that makes the opposite logically impossible?

    “You mean the buildings? Those are also reducible to the labor it took to make them. Same as any other product.”

    I mean land. Some sites are more productive than others, land contributes value to a product too.

    Also if non-products have no value then does anything that does the production but isn’t itself produced have no value?

    How does that fit with a cost-of-production theory of price? Also would labour be considered worthless?

    “Yes, cost is a price-attractor but price does not necessarily follow it to the letter. In a capitalist system, there will always be fluctuations due to power disparities, for instance (for an extreme example of that, see the glass of water in the desert).”

    You missed the point. There is no reason for labour cost to attract price, that relies on influences we can’t assume, all we know is that people will willingly undercut a price if they think the new price is still a gain in utility. People won’t price below *their* labour cost but that’s all we can know a priori.

    “Well, my assertion that usury is theft is not derived from STV. It’s an entirely different issue. Yes, of course I’d say that profit is theft and the result of power disparities.”

    No, your assertion is derived from LTV and you are trying to prove LTV via that assertion.

    “The point is: how do you know that any “non-scarcity” situation can’t be turned into profit-seeking and rent-seeking by capitalist profiteers, if this is what we have RIGHT NOW?”

    They are two different scenarios. Artificial scarcity is where we would have lots more stuff but don’t because the system has been rigged. Non-scarcity is where we actually do have lots more stuff.

  9. Francois Tremblay June 18, 2010 at 15:55

    “Yes we do, when we are studying the reality of those changing desires.”

    If you’re studying the reality of desires, you still need to base that reality on something outside the mind (e.g. the functioning of an EEG machine).

    “I’m not sure how you drew the conclusion that I’m trying to deny reality, though i’m beginning to think this is hopeless, since I *explicitly* stated that i’m arguing value is a relational property.”

    Well, I think this discussion is hopeless too, but as long as you’re arguing…

    “So what? Because some group of people thought something that makes the opposite logically impossible?”

    No, merely pointing out that they had the right epistemic approach, and you don’t.

    “I mean land. Some sites are more productive than others, land contributes value to a product too.”

    You mean soil? Soil doesn’t “contribute value” to anything, it’s not an agent of production. Soil CAN be used in production, sure, but like all other inert objects it’s not productive without labor.

    “Also if non-products have no value then does anything that does the production but isn’t itself produced have no value?”

    What? You can only be referring to human beings, and human beings are not the kind of thing that can be owned or have value. So it’s a category error.

    “You missed the point. There is no reason for labour cost to attract price, that relies on influences we can’t assume, all we know is that people will willingly undercut a price if they think the new price is still a gain in utility. People won’t price below *their* labour cost but that’s all we can know a priori.”

    What “influences we can’t assume” enter into Kevin Carson’s theory?

    “No, your assertion is derived from LTV and you are trying to prove LTV via that assertion.”

    My personal assertion that profit is theft is not derived from LTV; I believed that profit was theft before I adopted LTV as the valid theory of value. In fact, plenty of mutualists and left-libs (probably even some libsocs, although I can’t say for sure) believe profit is theft without adopting LTV at all.

    “They are two different scenarios. Artificial scarcity is where we would have lots more stuff but don’t because the system has been rigged. Non-scarcity is where we actually do have lots more stuff.”

    How do you know the system won’t always “be rigged”? My point is that, as long as capitalism exists, access to resources can always be restricted, no matter how much “lots more stuff” we can produce. I’ve been trying to explain this to you for a while now, but you just don’t seem to get it. You don’t seem to get that only socialism ensures equality between all individuals and ensures that resources are produced and distributed for the good of all.

  10. James June 20, 2010 at 17:33

    “If you’re studying the reality of desires, you still need to base that reality on something outside the mind (e.g. the functioning of an EEG machine).”

    But you would still assume that a changing desire would change the bit of reality, the desire that just changed, you were studying.

    You’ve already accepted that this is the question under discussion, whether value is relational or inherent. Until that question is settled no side can use “they seek to deny reality” as an argument and once it is settled the argument would be true but irrelevant.

    “No, merely pointing out that they had the right epistemic approach, and you don’t.”

    Well thank you, though that doesn’t really get us anywhere as a response. Do you accept that this too is a question that needs to be answered before anyone uses said answer as an argument?

    “You mean soil? Soil doesn’t “contribute value” to anything, it’s not an agent of production. Soil CAN be used in production, sure, but like all other inert objects it’s not productive without labor.”

    Yes, like labour is unproductive without land.

    This isn’t anything controversial, Land is a factor of production and more fertile land is more productive. Saying that labour creates all value is false because the exact same labour on different pieces of land will result in products that have a different value.

    “What? You can only be referring to human beings, and human beings are not the kind of thing that can be owned or have value. So it’s a category error.”

    Nope, you said yourself that land has no exchange value because it isn’t a product. Besides while I agree on moral grounds that people cant be owned the fact remains that slavery is real and people have been exchanged for a price. From an explanatory point of view it is not a catagory error.

    “What “influences we can’t assume” enter into Kevin Carson’s theory?”

    See one of my previous comments. The details about individual preferences and disutility of labour.

    “My personal assertion that profit is theft is not derived from LTV; I believed that profit was theft before I adopted LTV as the valid theory of value. In fact, plenty of mutualists and left-libs (probably even some libsocs, although I can’t say for sure) believe profit is theft without adopting LTV at all.”

    I was thrown off by this:

    “In fact, as I’ve pointed out before, profit (like all surplus value) also originates in labour.”

    “How do you know the system won’t always “be rigged”? My point is that, as long as capitalism exists, access to resources can always be restricted, no matter how much “lots more stuff” we can produce.”

    Yes but we’re discussing two entirely different scenarios.

    Artificial scarcity is where we have scarcity, therefore prices, but the potential for non-scarcity (or atleast reduced scarcity)

    Non-scarcity is where there is no scarcity or prices.

    This has *nothing* to do with capitalism or socialism. We can discuss what causes what causes scarcity, artificial or otherwise, some other time for now let’s stick to the point.

    You claimed STV doesnt explain prices because it predicts prices dissappearing with scarcity whereas in the real world we still have prices and the only scarcity is artificial. This is false because STV only predicts prices falling to zero when we actually have abundance not just a potential for abundance restricted by governments or capitalism or whatever else.

  11. Francois Tremblay June 20, 2010 at 18:17

    “But you would still assume that a changing desire would change the bit of reality, the desire that just changed, you were studying.”

    Because the desire itself is “the bit of reality,” yes. But it would be a new desire at time T, it wouldn’t magically change the desire that existed at time T-1.

    “You’ve already accepted that this is the question under discussion, whether value is relational or inherent. Until that question is settled no side can use “they seek to deny reality” as an argument”

    I’m not using it as an argument. I’m using it to label them as crazy. It seems obvious to me that anyone who believes their desires somehow change reality by magic is crazy. You might disagree.

    “Do you accept that this too is a question that needs to be answered before anyone uses said answer as an argument?”

    What, that we should settle the question of whether one should discover reality or make it up (sorry, I mean “invent” it)?

    “labour is unproductive without land. This isn’t anything controversial, Land is a factor of production and more fertile land is more productive.”

    Now you’re talking about farming. If you knew anything about farming, you’d know it’s soil, especially microorganisms in that soil, that makes an area fertile or not, not “land.” Unlike your proposition, this is not controversial. If you’re trying to argue that labor is unproductive without space, well, it’s also unproductive without time, or without matter. Bringing up cosmology won’t help your argument either.

    “Besides while I agree on moral grounds that people cant be owned the fact remains that slavery is real and people have been exchanged for a price. From an explanatory point of view it is not a catagory error.”

    Your argument makes no sense. The fact that people are mistaken about human beings being objects does not mean that human beings are objects. You are plunging into rank subjectivism, which is not surprising since you support STV.

    “See one of my previous comments. The details about individual preferences and disutility of labour.”

    I already gave my own arguments regarding Carson’s theory in general.

    “You claimed STV doesnt explain prices because it predicts prices dissappearing with scarcity whereas in the real world we still have prices and the only scarcity is artificial. This is false because STV only predicts prices falling to zero when we actually have abundance not just a potential for abundance restricted by governments or capitalism or whatever else.”

    My point was that there is no reason to believe that an STV system would ever abandon artificial scarcity measures, since those measures are to a certain extent innate to STV, and that therefore there is no reason to ever expect global STV prices to go down to zero. You posit that global STV prices would go down to zero when we “actually have abundance.” But, as far as we know or can suppose, this is actually impossible. Even if we start from the scenario of “actual abundance,” there is no a priori reason to believe that an STV system would not develop means to exclude people from consuming goods, especially if these automated factories still have “private owners.”

  12. James June 22, 2010 at 16:47

    “Because the desire itself is “the bit of reality,” yes. But it would be a new desire at time T, it wouldn’t magically change the desire that existed at time T-1.”

    No but it would be a change in reality as a whole and in this case a change in relation between a person and object which is really the point i’m trying to make.

    “I’m not using it as an argument.”

    to quote yourself:

    “When I argue with them about reality being what it is regardless of our desires”

    “It seems obvious to me that anyone who believes their desires somehow change reality by magic is crazy. You might disagree.”

    That depends. Someone who reckons a house is actually a car because they desire that is certainly crazy, perhaps more so than a person who believes our desires are not part of reality…

    Some facts are obviously inherent whereas some are relational, all we are arguing is economic value falls under the latter. Not that we have magical powers and change all aspects of reality via wish.

    “What, that we should settle the question of whether one should discover reality or make it up (sorry, I mean “invent” it)?”

    Again that all depends on the specific bit of knowledge. You seem to be implicitly assuming that if we say fact X is based on desire then all facts are based on desire. That’s the only way I can make sense of this.

    Clearly no one is saying we invent reality as a whole. My point was it could be possible for us to invent an abstract concept (which would then be part of reality).

    “Now you’re talking about farming. If you knew anything about farming, you’d know it’s soil, especially microorganisms in that soil, that makes an area fertile or not, not “land.” Unlike your proposition, this is not controversial. If you’re trying to argue that labor is unproductive without space, well, it’s also unproductive without time, or without matter. Bringing up cosmology won’t help your argument either.”

    Right but in economics (and IMO common sense) soil is considered “land”. It really isn’t controversial that land, labour and capital are the factors of production. My point being that some bits of land are more productive than others and the same labour on different bits of land will yield different results. Therefore not all value was created by labour.

    “Your argument makes no sense. The fact that people are mistaken about human beings being objects does not mean that human beings are objects. You are plunging into rank subjectivism, which is not surprising since you support STV.”

    Read it again, carefully. Pay close attention to “agree on moral grounds” and “explanatory”. I don’t think there is any consistent way to consider a person as owned by someone else. However, that doesn’t mean that a theory of value can’t or shouldn’t explain how prices would form if people mistakenly acted as though they could own others.

    This is explanatory subjectivism not normative subjectivism.

    “I already gave my own arguments regarding Carson’s theory in general.”

    I know, I was disputing them.

    “My point was that there is no reason to believe that an STV system would ever abandon artificial scarcity measures, since those measures are to a certain extent innate to STV, and that therefore there is no reason to ever expect global STV prices to go down to zero.”

    But i’ve already answered this. STV, plus most versions of LTV i’ve come across, are descriptive of how prices are formed not prescriptive so the concept of “an STV system” doesn’t make sense. STV claims to explain how pricing works in all systems, including socialism and post scarcity scenarios, not just capitalism.

  13. Francois Tremblay June 22, 2010 at 17:50

    “No but it would be a change in reality as a whole and in this case a change in relation between a person and object which is really the point i’m trying to make.”

    Not sure I’m following you here. How is the change in desires a “change in a relation between a person and object”? There is no change in the relation between me and the desire at T-1. Every singular desire is a mental object within the continuity of my identity.

    ““I’m not using it as an argument.”

    to quote yourself:

    “When I argue with them about reality being what it is regardless of our desires””

    All right, I see what you mean. My point was, I don’t use this as an argument in the early stages of the discussion: I just point it out when I realize that they are actually subjectivists (i.e. they actually believe that their desires change reality in some way) and not just mistaken.

    I don’t think it’s really an argument, in the sense that all arguments are founded on the premise that reality is what it is and can be discovered, so arguing such points is really pointless. They have placed themselves beyond rational discourse.

    “Some facts are obviously inherent whereas some are relational, all we are arguing is economic value falls under the latter. Not that we have magical powers and change all aspects of reality via wish.”

    I have met STVers who were actually subjectivists, who actually believed that their desires changed the reality they were desiring about. One guy said value was the only exception to the axiom of reality being objective. Such people, I consider properly insane.

    “Clearly no one is saying we invent reality as a whole. My point was it could be possible for us to invent an abstract concept (which would then be part of reality).”

    I never said otherwise, but if you do so, you should not pretend that this abstract concept is saying anything about the outside world. You can make up, say, a concept of souls, but you can’t then claim that we actually, really all have souls and that the mind is immaterial. Once again, this is more like insanity than like arguing.

    “Right but in economics (and IMO common sense) soil is considered “land”.”

    It is not “common sense” at all. Land is an abstract delimitation of area. Soil and organisms are actual objects.

    “It really isn’t controversial that land, labour and capital are the factors of production. My point being that some bits of land are more productive than others and the same labour on different bits of land will yield different results. Therefore not all value was created by labour.”

    What a non sequitur. How does the productivity of “land” “prove” that not all value is created by labor? However productive land is, that productivity has to be brought out by labor, and has to be then used by labor. Without any labor, “land” does not sustain human life.

    “Read it again, carefully. Pay close attention to “agree on moral grounds” and “explanatory”.”

    Don’t act as if I didn’t read what you said. I fully understand your position. Your position is that, because slavery is real and an individual’s exchange value has been established, therefore individuals really do have an exchange value (even though you personally don’t believe they do, but that in reality they actually do). Is this a fair description?

    My answer is still the same: they were all mistaken at a factual level. You are describing the situation as people establishing exchange values. I am describing the situation as people being mistaken and committing a category error. This is not an ethical issue but a factual issue. One may try to explain what caused these specific exchange values, but it is unnecessary. Likewise, a scientist may be able to explain why some people thought the Earth was flat, and the various dimensions that people ascribed to this flat Earth, but why should he? It’s not his job to be a psychologist and try to understand people’s delusions.

    “I don’t think there is any consistent way to consider a person as owned by someone else. However, that doesn’t mean that a theory of value can’t or shouldn’t explain how prices would form if people mistakenly acted as though they could own others.”

    Why? That’s a psychologist’s job. It’s an issue of “why people believe weird things,” “the delusions of crowds,” not of economics.

    “But i’ve already answered this. STV, plus most versions of LTV i’ve come across, are descriptive of how prices are formed not prescriptive so the concept of “an STV system” doesn’t make sense. STV claims to explain how pricing works in all systems, including socialism and post scarcity scenarios, not just capitalism.”

    We both know that STV is the foundation of capitalism, so I think you know what I mean. If not, then replace “STV system” by “capitalist system.” My basic point is that STV does not predict prices getting to zero in post-scarcity, however you cut it. I was just using the more concrete aspect to illustrate my point.

  14. James June 24, 2010 at 06:54

    “Not sure I’m following you here. How is the change in desires a “change in a relation between a person and object”? There is no change in the relation between me and the desire at T-1. Every singular desire is a mental object within the continuity of my identity.”

    No but there is a (very small) change in reality over all. The move from T-1 to T-2 and creating a whole new fact illustrates this as much as if T-1 itself changed.

    “I have met STVers who were actually subjectivists, who actually believed that their desires changed the reality they were desiring about. One guy said value was the only exception to the axiom of reality being objective. Such people, I consider properly insane.”

    Someone saying that reality is subjective would be insane but the subjectivism in STV is subjective in the way emotions are subjective states but still an objective fact about reality. “Ice cream makes me happy” is both an expression of my subjective values and a fact about the relation between myself and ice cream.

    “I never said otherwise, but if you do so, you should not pretend that this abstract concept is saying anything about the outside world. You can make up, say, a concept of souls, but you can’t then claim that we actually, really all have souls and that the mind is immaterial. Once again, this is more like insanity than like arguing.”

    I was thinking more along the lines of political philosophy. We can invent concepts, say democracy, that have some relation to the outside world.

    “It is not “common sense” at all. Land is an abstract delimitation of area. Soil and organisms are actual objects.”

    They aren’t identical but soil is one of the things usually catagorised under “land”. Delimitation sounds more like land ownership than land.

    “What a non sequitur. How does the productivity of “land” “prove” that not all value is created by labor? However productive land is, that productivity has to be brought out by labor, and has to be then used by labor. Without any labor, “land” does not sustain human life.”

    Well technically all value is created by labour, with the cooperation of land. Nothing can be created without both being used. I would say that because the same labour can produce differently valued results when using different bits of land that not all the value is due to the labour involved making it. All agency or responsibility perhaps but that seems more like an ownership issue than a value issue.

    “Don’t act as if I didn’t read what you said. I fully understand your position. Your position is that, because slavery is real and an individual’s exchange value has been established, therefore individuals really do have an exchange value (even though you personally don’t believe they do, but that in reality they actually do). Is this a fair description?”

    Close enough which leaves me puzzled as to how you came to your previous conclusion. I think the exchange value is real but the ownership is not. The fact that the exchange value came about via mistaken ideas about ownership doesn’t prove that the exchange values somehow aren’t real anymore than under any flawed system.

    “One may try to explain what caused these specific exchange values, but it is unnecessary. Likewise, a scientist may be able to explain why some people thought the Earth was flat, and the various dimensions that people ascribed to this flat Earth, but why should he? It’s not his job to be a psychologist and try to understand people’s delusions.”

    Economics would be all but useless if it could only explain our favoured system. Like I said exchange values can come about despite flawed ideas on property and still be relevant. It isn’t an economists job to understand people’s delusions but it is his job to understand how they will act given those delusions.

    “Why? That’s a psychologist’s job. It’s an issue of “why people believe weird things,” “the delusions of crowds,” not of economics. ”

    It’s not an issue of why but of what follows from the belief in wierd things.

    “We both know that STV is the foundation of capitalism, so I think you know what I mean. If not, then replace “STV system” by “capitalist system.” My basic point is that STV does not predict prices getting to zero in post-scarcity, however you cut it. I was just using the more concrete aspect to illustrate my point.”

    Well, I just said its explanatory not normative so my answer remains the same. The root of capitalism would surely be a specific view of ownership. Capitalism may or may not always include artificial scarcity but this is not relevant to STV which only describes how prices are formed. I think you’re confusing arguments for capitalism that use STV with arguments for STV=arguments for capitalism.

  15. Francois Tremblay June 24, 2010 at 17:06

    “No but there is a (very small) change in reality over all. ”

    What of it?

    “Someone saying that reality is subjective would be insane but the subjectivism in STV is subjective in the way emotions are subjective states but still an objective fact about reality.”

    If your thesis is that the kind of value involved in STV is purely emotional and that all that is realist about it is that it exists, then we can both agree on that. I agree that it’s like emotions. Is that what you’re saying?

    “I was thinking more along the lines of political philosophy. We can invent concepts, say democracy, that have some relation to the outside world.”

    No one “invented” democracy. It is one of the possible modes of relation between individuals. There are not a wide variety of such modes, and any human society will necessarily contain all of them, ready to be observed.

    “Well technically all value is created by labour, with the cooperation of land. Nothing can be created without both being used. I would say that because the same labour can produce differently valued results when using different bits of land that not all the value is due to the labour involved making it.”

    But it’s not “the same labor.” If you mean the same labor-time, then yes, of course, but that applies to every other material. Why single out land in this?

    “Close enough which leaves me puzzled as to how you came to your previous conclusion.”

    Uh, I was just showing how absurd your position is. I don’t agree with it.

    “I think the exchange value is real but the ownership is not. The fact that the exchange value came about via mistaken ideas about ownership doesn’t prove that the exchange values somehow aren’t real anymore than under any flawed system.”

    What do you mean? If your premise is false, then your conclusion is never justified. This is just basic epistemology.

    “It isn’t an economists job to understand people’s delusions but it is his job to understand how they will act given those delusions.”

    Once again, that’s not the job of the economist. Understanding people’s delusions and how they act on their basis is the job of the psychologist.

    “Well, I just said its explanatory not normative so my answer remains the same. The root of capitalism would surely be a specific view of ownership. Capitalism may or may not always include artificial scarcity but this is not relevant to STV which only describes how prices are formed. I think you’re confusing arguments for capitalism that use STV with arguments for STV=arguments for capitalism.”

    I am not “confusing” arguments, you are the one who is artificially separating them. Yes, I understand that STV is in theory separate from capitalism, but we both know that’s not a reality. STV necessarily implies the validity of usury, and by extension the concentration of wealth, while LTV necessarily implies its invalidity.

  16. James June 27, 2010 at 09:05

    For the sake of shortening the comments i’m just responding to the more important issues.

    “If your thesis is that the kind of value involved in STV is purely emotional and that all that is realist about it is that it exists, then we can both agree on that. I agree that it’s like emotions. Is that what you’re saying?”

    Yes, pretty much.

    “But it’s not “the same labor.” If you mean the same labor-time, then yes, of course, but that applies to every other material. Why single out land in this?”

    I’m singling out land because you said that all other materials involved we’re reducible to labour because they we’re made by labour. Land is unique because it isn’t created by labour and because it’s also a means of production it means that all other materials reduce to land+labour.

    “If your premise is false, then your conclusion is never justified. This is just basic epistemology.”

    I don’t think a correct theory of ownership is a premise for exchange values. To the degree it has effects on economic issues it’s relevant for an economist to study it.

    “STV necessarily implies the validity of usury, and by extension the concentration of wealth, while LTV necessarily implies its invalidity.”

    Not without a theory of just distribution. Combined with a theory that said “income is justified when it doesnt contradict the correct theory of value” it would have the above conclusion but not by itself or combined with a different theory.

  17. Francois Tremblay June 27, 2010 at 16:30

    “Yes, pretty much.”

    Then there’s no disagreement. We both agree that it refers to no real phenomenon.

    “I’m singling out land because you said that all other materials involved we’re reducible to labour because they we’re made by labour. Land is unique because it isn’t created by labour and because it’s also a means of production it means that all other materials reduce to land+labour.”

    Land is not created by labour, but its productive actuality is created by labour, as I JUST pointed out to you.

    “I don’t think a correct theory of ownership is a premise for exchange values. To the degree it has effects on economic issues it’s relevant for an economist to study it.”

    … in order to exchange something or receive something in exchange, you need to own it. Do you really not understand this?

    At least give me the basic courtesy of following the discussion better.

    BTW, there is no justification for the right to trade within property rights either. Even if one accepts property rights and that person X has a title to some property, how does one derive the right for someone else to receive the title in an exchange with person X? So far no one has been able to answer that one.

    “Not without a theory of just distribution. Combined with a theory that said “income is justified when it doesnt contradict the correct theory of value” it would have the above conclusion but not by itself or combined with a different theory.”

    This “theory of just distribution” is simply that one upholds what is true and rejects what is false. In short, it’s an epistemic issue, again.

  18. James June 28, 2010 at 04:57

    “Then there’s no disagreement. We both agree that it refers to no real phenomenon.”

    No it doesn’t. Unless your crazy enough to condier emotions and their relation to objects are part of reality…

    “Land is not created by labour, but its productive actuality is created by labour, as I JUST pointed out to you.”

    Yes I know, like I JUST pointed out in response the productive actuality of labour is created by land either. Labour does nothing unless it has something to labour with.

    “… in order to exchange something or receive something in exchange, you need to own it. Do you really not understand this?

    At least give me the basic courtesy of following the discussion better.”

    If your gonna insult me this is probably a waste of time.

    If *you* followed the discusssion carefully you would have noticed I said “correct theory of ownership” not “ownership”. Clearly you can have exchanges of property based on theft or a legal fiction.

    “This “theory of just distribution” is simply that one upholds what is true and rejects what is false. In short, it’s an epistemic issue, again.”

    No, it isn’t. There is absolutely nothing about a theory of value that implies normativity. It has to be combined with something else to make it normative and then you have to argue for that position, not just say “i’m upholding what is true and rejecting what is false” in the most blatently question begging manner possible.

  19. Francois Tremblay June 28, 2010 at 05:08

    “No it doesn’t. Unless your crazy enough to condier emotions and their relation to objects are part of reality…”

    Fine then, replace “real” with “outside of the mind,” if you must be nitpicky.

    “Yes I know, like I JUST pointed out in response the productive actuality of labour is created by land either. Labour does nothing unless it has something to labour with.”

    That’s true, but not a counter-argument. I never claimed that labor did not require resources to act upon.

    “If your gonna insult me this is probably a waste of time.”

    This conversation is not exactly scintillating to begin with.

    “If *you* followed the discusssion carefully you would have noticed I said “correct theory of ownership” not “ownership”. Clearly you can have exchanges of property based on theft or a legal fiction.”

    Only if you are willing to stretch the definition of “property” beyond credulity. Your whole approach makes about as much sense as saying that you can have communications with God even though your belief in God is based on fiction.

    “No, it isn’t. There is absolutely nothing about a theory of value that implies normativity. It has to be combined with something else to make it normative and then you have to argue for that position, not just say “i’m upholding what is true and rejecting what is false” in the most blatently question begging manner possible.”

    Why should I have to argue for the position that a true proposition applies to reality? You’re arguing in circles. If you hold a proposition as true, then it is true regardless of the context in which the concept in that proposition presents itself.

    If I agree that gravity is proportional to mass and inversely proportional to distance squared, and then I go around selling astrology services, which is based on the premise that the gravity from the planets and stars is so significant as to influence the body of a newborn, when the equations clearly prove this as incorrect, should I not consider myself acting wrongly? Or are you denying that truth has any bearing at all on reality once we find it? That it is sterile?

  20. James June 29, 2010 at 11:51

    “This conversation is not exactly scintillating to begin with.”

    Let’s leave it here then

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