Wednesday, April 06, 2005

Exploitation And The Labour Theory Of Value

Brad De Long has, in response to an email, written a what he thinks is a little take-down of a marxist notion of exploitation. Basically, his argument is that when capital investment, the resources for which are provided by hard work and scrimping and saving, increases the resources for all, albeit differentially, so that workers, while not as well-off in resource terms as the capitalists, are better off than they were before the capitalists existed, no exploitation exists because a) the workers are better off and b) the capitalists worked to get what the advantages they have. I don't think this is very convincing, because the question asked by inquiring whether the workers are exploited is not whether they are better off than they otherwise would be, but whether they are getting their full entitlements. Since Marx assumes that we are entitled to the products of our labour, a claim De Long makes no effort to attack, the workers are exploited: even though they are better off, because they are not recieving the full product of their labour, they are being exploited by the capitalist, who is creaming part of it off.

Now, I don't find the claim that we are entitled to all the products of our labour very convincing at all, because it implies that anyone who does not work is exploiting those who do, including the elderly, children, the disabled and the sick, as well as making it justifying the existence of vast income differentials because of the differentials in market value of products (I know that Marxian economics posits the labour theory of value as the true value of goods, but that is simply implausible: are two identical chairs of different value simply because one took twice as long to make?). What is objectionable about the market is that it does not take into account the basic moral requirements imposed on our treatment of our fellow human beings simply in virtue of being fellow human beings, but rather hovers around an equilibrium where no further trades are advantageous, which may leave some incredibly wealthy and others in miserable poverty. We need to think rather about whether the distribution of costs and benefits as it stands justifiable to all those upon whom those costs and benefits fall. This seems to be something like what Matt Yglesias, despite his (hack, spit!) utilitarian tendencies, is saying.


Anonymous said...

Hi Rob,

What is a worker's "full entitlement"? Is this a notion to which is attributed a monetary value? To me, "full entitlement" as a non-technical phrase might imply things that are not easily characterised in monetary terms: certain sorts treatment for example.

With regard to entitlement and the problem of dependents, can't one distinguish clearly that part of one's entitlement that one misses out on because of an obligation to help others and that part leaked to those in position's of power who are not in corresponding need? Then one might be happy with the former reduction in entitlement but not the latter. So one might be happy with the idea that people receive their entitlements once their moral obligations have been fulfilled.

Also, I thought that one key lesson we learnt from undergraduate economics was that real-life, distorted markets rarely do as well as even hovering around mutually advantageous equilibriums. But it may or may not be true that a position close to equilibrium leaves some wealthy and others in poverty as you claim - just the fact that the market hasn't cleared doesn't tell you that about the distribution of income.


Rob Jubb said...


for a conventional Marxist, I think, the implication of the usual claim about exploitation is that workers are entitled to the products of their labour. It's not a technical phrase, in the sense of being economics jargon, but a moral claim: because I produced it, I am entitled to it. Obviously, that's not the whole of the Marxist critique of capitalism: the alienation from our true selves also matters, which isn't wholly parasitic on the exploitation critique.

However, I do think that, at least before full-blown communism, the exploitation critique implies that all those who do not labour are exploitative. Because of the Marxian focus, incorrectly, on the worker and the capitalist as the two archetypes of capitalism, it is difficult to find the theoretical space to fit in a claim about dependents, although perhaps not impossible. Certainly, absent further claims, the exploitation critique implies that all those who live off the products of others are exploiting them, which does include those unable to work. Personally, I'm perfectly happy with the entitlements equals product minus moral obligations, but the obvious problem is how to decide on what our moral obligations are.

I think though - and I only did a year of undergraduate economics, remember - that markets will clear, even when distorted, just not clear at the point where marginal costs equal marginal benefits: a less distorted market would clear at a more efficient point, rather than being the only sort of market that clears at all. Obviously, I agree with you about the distribution point: a market can clear when one person has all the income, but that tells us nothing about the equity of such a situation.

Rob Jubb said...

BTW, the thing about the LTV containing a hidden premise of self-ownership is owed to G.A. Cohen, if anyone is interested.