NationStates Jolt Archive

Would a hooker be a proletariat or a capitalist?

Lumpenproletariat.

Edit: Where prostitution is legal and somewhat accepted in mainstream society, either petit-bourgeois (if he or she makes the deals herself and keeps the profits) or proletarian (if he or she is an employee of a brothel owned by someone else.)

Would a hooker be a proletariat or a capitalist?

Depends on if he or she is working for the good of the people or self enrichment. :D

A prostitute would be a proletarian, a pimp would be a capitalist.

According to Marx?

Neither.

it depends on how she works

if she works only for herself she is a member of the petite Bourgeoisie

if she works for a pimp or a madam she is a member of the proletariat.

It is a fundamental problem of marxism. A factory worker can turn around and hire a cleaning lady. A construction worker can own all of his own tools and employ workers, but he turns around and works for a doctor who owns less capital.

How do you know who to rebel against?

It is a fundamental problem of marxism. A factory worker can turn around and hire a cleaning lady. A construction worker can own all of his own tools and employ workers, but he turns around and works for a doctor who owns less capital.

How do you know who to rebel against?
Provided that there is no exploitation involved, I don't think that marx would have had a problem with hiring a clearning lady (and if she isn't a full time person, there isn't any problem at all. It wouldn't be any different from a simple exchange for services, with nothing to do with capital etc)

It is a fundamental problem of marxism. A factory worker can turn around and hire a cleaning lady. A construction worker can own all of his own tools and employ workers, but he turns around and works for a doctor who owns less capital.

How do you know who to rebel against?

If you believe the rhetoric, anyone with more than you. ;)

Provided that there is no exploitation involved, I don't think that marx would have had a problem with hiring a clearning lady (and if she isn't a full time person, there isn't any problem at all. It wouldn't be any different from a simple exchange for services, with nothing to do with capital etc)

I had the understanding that all money provides the means for exploitation. If there is a wage paid, there is exploitation.

I had the understanding that all money provides the means for exploitation. If there is a wage paid, there is exploitation.

No. If you're seeking a profit from someone else's labor, there is exploitation, in the Marxist sense.

Paying a maid to do a specific cleaning task for you isn't exploitation. It's the equivalent of buying any other commodity. Sure, you purchase it by purchasing someone's labor, but since all commodities are just a manifestation of labor-power, there is no effective difference between paying a maid to clean your house and buying an apple.

What's exploitative is when all the vacuum cleaners are already bought, or are too expensive for the maid to buy, and you hire her to clean a house owned by someone else, who is paying you. The result is that you pocket a portion of the value - what Marx calls surplus-value - that she produces through her labor.

Would a hooker be a proletariat or a capitalist?
Yes.

I had the understanding that all money provides the means for exploitation. If there is a wage paid, there is exploitation.
You would be understanding wrong.

Edit: To expand further on Soheran's point, simply buying services from someone who is an exploiter does not make you an exploiter, nor does hiring a live in maid etc. It becomes an issue when you actively attempt to make a profit off of that person where exploitation comes into play. I have a slight problem with even using the word exploitation, as there is nothing wrong with hiring per se, but rather the fact that hiring workers tends to lead to a drive to get more and more production out of them for less and less pay.

The prostitute by traditional marxist theory is clearly a proletariat, dependent upon selling her labor for wages. I don't agree with marx's use of the lumpenproletariat to hold the prostitutes. It simply doesn't make any sense.

My bad, I had heard the argument that "work or starve" is exploitation so many times I forgot that exploitation was just the employer's assumption of risk.

My bad, I had heard the argument that "work or starve" is exploitation so many times I forgot that exploitation was just the employer's assumption of risk.
Yeah, damn those bakers for not wanting to work 17 hour days :rolleyes:

Yeah, damn those bakers for not wanting to work 17 hour days :rolleyes:

What?

I'm gonna say proletarient, but this case kinda fits outside of definability

My bad, I had heard the argument that "work or starve" is exploitation so many times I forgot that exploitation was just the employer's assumption of risk.

No, the subsistence farmer must "work or starve" as well, but he is not exploited in the Marxist sense.

For Marx, capitalist exploitation was defined in terms of the labor theory of value. You are probably familiar with it, and you are probably also aware that it has been rejected as a useful economic theory. Since then, Marxists have redefined exploitation in terms of inequities in the bargaining power of employers and employees.

What?

He is probably alluding to the famous Supreme Court case Lochner v. New York, in which the Court struck down legislation limiting bakers' working hours to 10 hours per day.

No, the subsistence farmer must "work or starve" as well, but he is not exploited in the Marxist sense.

For Marx, capitalist exploitation was defined in terms of the labor theory of value. You are probably familiar with it, and you are probably also aware that it has been rejected as a useful economic theory. Since then, Marxists have redefined exploitation in terms of inequities in the bargaining power of employers and employees.

Could you have a big conference and explain that to the Marxists on NS?

What?

Chapter 10 of Capital, The Working Day: http://www.marxists.org/archive/marx/works/1867-c1/ch10.htm

Just search for "bakers" if you're really interested in the reference; you probably don't want to wade through the whole thing.

What?
You've never read capital, have you?


Marx goes into lengths about what constitutes exploitation, and gives many examples of this happening. Bakers, who had to work obscenely long hours, are but one example.

The prostitute by traditional marxist theory is clearly a proletariat, dependent upon selling her labor for wages. I don't agree with marx's use of the lumpenproletariat to hold the prostitutes. It simply doesn't make any sense.

Yes it does.

Key to Marx's conception of the proletariat is that they are gathered onto the factory floor by the owner, who thereby teaches them organization and discipline. Wage workers outside the factory were only considered a part of the proletariat when the nature of their work made them natural allies of the factory proletariat.

It is at best unclear how a prostitute would participate in the "class consciousness" of the proletariat.

For Marx, capitalist exploitation was defined in terms of the labor theory of value. You are probably familiar with it, and you are probably also aware that it has been rejected as a useful economic theory. Since then, Marxists have redefined exploitation in terms of inequities in the bargaining power of employers and employees.

"Defined in terms," yes, but not dependent on it. The theory of surplus-value works just as well using any other serious theory of value, if you just alter some of the phrasing.

The only thing that really needs meaningful alterations is the idea that unskilled workers will always be paid at the substinence level.

Yes it does.

Key to Marx's conception of the proletariat is that they are gathered onto the factory floor by the owner, who thereby teaches them organization and discipline. Wage workers outside the factory were only considered a part of the proletariat when the nature of their work made them natural allies of the factory proletariat.

It is at best unclear how a prostitute would participate in the "class consciousness" of the proletariat.
Unclear, yes, but claiming that they are against a revolution/have a stake in keeping society as it is is simply absurd. I've never heard of a person who wants to be a prostitute, nor is there a better example of exploitation then the entire prostitute/madame relationship.

Unclear, yes, but claiming that they are against a revolution/have a stake in keeping society as it is is simply absurd.

No, actually it's not, and it's been proven unfortunately accurate regarding even the most oppressed portions of the proletariat. It isn't that prostitutes, beggars, etc. are in favor of the current state of things, but rather that they are so desperate that they are dependent on society's proper order so that they can survive.

Capitalists don't give charity when the proletariat is mounting a revolution, they have other concerns.

"Defined in terms," yes, but not dependent on it.
No, not dependent on it... which is why the theory has survived the death of the labor theory of value.
The theory of surplus-value works just as well using any other serious theory of value, if you just alter some of the phrasing.
No, it doesn't. It relies on an absolute concept of "value" that is entirely untenable. It does work as a fair description of capitalist calculations of value, in practice... but that is as far as it goes. It does not provide any theoretical position from which a worker can complain that he is being paid "less than he is worth."

To do that, one has to examine the power relationship between employer and employed to demonstrate inequities in bargaining power.

Unclear, yes, but claiming that they are against a revolution/have a stake in keeping society as it is is simply absurd. I've never heard of a person who wants to be a prostitute, nor is there a better example of exploitation then the entire prostitute/madame relationship.

Marx never claimed that they would not benefit, in the long run, from the revolution of the proletariat.

What he did claim is that they would not be able to see the forest for the trees... that as factory workers attempted to overthrow the capitalist structure, many of the lumpenproletariat would only see their wealthy bourgeoise customers being legislated out of existence.

While potential beneficiaries of class revolution, they do not see themselves as a part of the class.

This analysis may be incorrect... I am not suggesting that it is closed to theoretical challenges. But if the question is what Marx himself believed, this is the answer.

No, it doesn't. It relies on an absolute concept of "value" that is entirely untenable.

You can just say that the general equilibrium price at which a given commodity is sold is its "value," and that the nature of capitalist production makes the "value" of labor-power less than the "value" it produces (and the fact that it does is obvious from the fact that the capitalist makes a profit.)

Exactly as Marx did, only with a different theory of value.

No, actually it's not, and it's been proven unfortunately accurate regarding even the most oppressed portions of the proletariat. It isn't that prostitutes, beggars, etc. are in favor of the current state of things, but rather that they are so desperate that they are dependent on society's proper order so that they can survive.

Capitalists don't give charity when the proletariat is mounting a revolution, they have other concerns.
I'm sorry, but I simply don't see the historical evidence there. The government itself forces them into that position, and the position is such that almost no person wishes to do it unless forced into that position by crushing poverty.

I'm sorry, but I simply don't see the historical evidence there.

Vanguardism. Why do you think it came to be?

Vanguardism. Why do you think it came to be?
(I think I see the reference, but I'm not entirely clear as to what you are referring to, mind explaining a bit more?)

But wouldn't the prostitute class have an interest in removing the society that is pushing it into it's position, thus cooridinating it's interests with that of the proletariat as a whole?

(edit: I should add that I'm not talking about the prostitutes that serve the upper classes, the high priced escorts, etc, rather the streetwalkers)

You can just say that the general equilibrium price at which a given commodity is sold is its "value,"
No, you can't. That is its price. "Value" is not the same as price. Value is relative.
and that the nature of capitalist production makes the "value" of labor-power less than the "value" it produces
In terms of relative value, that is true of all exchange. If the value received by the purchaser were not equal to or higher than the value of the money he pays, he would not pay. If you consider this "exploitation," then you have to assume that you are also exploiting the cleaning person in the previous example (which you correctly said was not, in fact, exploitation). If I did not value the money I pay her less than I value her labor, I would not give her the money for the labor.

Exactly as Marx did, only with a different theory of value.
No, Marx's theory assumed that value is objective. But it simply is not: value is subjective and relative.

Thus, it is always possible that I hire someone to do a job for me, and I ultimately profit, without exploitation occurring.

For instance, suppose I make a chair, and I find I can sell it for $20. But my friend John says he will buy it from me for $40 if I can paint a nice pattern on it. Since I am not a good painter, I hire my brother to do the paint-job. I pay him $10 for the job. Little did I know, he would have done it for $5.

Now, I made a profit of $10 on his labor, but I did NOT pay him $10 less than the value of his labor.... He actually feels like he made out well, since the value of his labor to him was only $5!!

This is NOT exploitation... but Marx's labor theory of value would say that it is.

The reason it is not exploitation is that we were equal partners to the deal... He could easily have said no, or bargained for a higher price.

The relationship between the capitalist and the laborer is different. Usually, the capitalist is in a far better position to bargain than is the laborer.

Soheran, why are you so married to the labor theory of value?

I would understand if it were critical to Marxist theory, so that you needed to defend it as an essential part of the ideology in which you believe...

But the fact of the matter is that Marxist theory has survived perfectly well without it. By clinging to it, you only discredit yourself and make it harder to argue the Marxist political-economic point.

You've never read capital, have you?

I find summaries to be far less of a waste of time.

Soheran, why are you so married to the labor theory of value?

I'm not, I don't agree with it. Marx's theory of surplus-value should be defended, though.

No, Marx's theory assumed that value is objective. But it simply is not: value is subjective and relative.

Use-value is. Exchange-value is not, because all those subjective values for things ultimately express themselves in a certain quantitative value. We no longer bargain for prices. Marx may have been wrong about the determinants of exchange-value, but they really don't matter for the theory of surplus-value.

Thus, it is always possible that I hire someone to do a job for me, and I ultimately profit, without exploitation occurring.

For instance, suppose I make a chair, and I find I can sell it for $20. But my friend John says he will buy it from me for $40 if I can paint a nice pattern on it. Since I am not a good painter, I hire my brother to do the paint-job. I pay him $10 for the job. Little did I know, he would have done it for $5.

Now, I made a profit of $10 on his labor, but I did NOT pay him $10 less than the value of his labor.... He actually feels like he made out well, since the value of his labor to him was only $5!!

This is NOT exploitation... but Marx's labor theory of value would say that it is.

The reason it is not exploitation is that we were equal partners to the deal... He could easily have said no, or bargained for a higher price.

I think there's a lot wrong with this argument.

If your brother wanted the full $20, he could probably get it. He (I'm assuming) is economically independent, and has the "means of production" necessary for painting - paints, brushes, etc. By accepting less than that 20$, the only thing that allows you to make a profit, he is either doing you a favor, or is losing out because of his ignorance of the deal. If it is the latter you are indeed exploiting him, because his labor is worth less to him simply because he isn't aware of its true potential value (and thus you are actually bargaining from unequal positions, too). If it's the former he's just being nice, and you are not exploiting him - but since workers and capitalists do not behave that way (according to most economic theories, at least) that's beside the point as far as this argument.

The fact of the matter is that your brother is adding $20 to the exchange-value of the product (assuming that John is paying the market price) through his labor, and of that value you are giving him $10, and pocketing $10 you stole from his labor.

The reason the capitalist makes a profit is, generally, not that their workers are doing them a favor, but rather that there is indeed a difference in bargaining power between workers and capitalists. Marx understood the bargaining power issue; he argues that the control of the capitalists over the means of production is what allows them to extract surplus-value in the first place. While before the rise of industrial capitalism a worker made his own commodities with his own tools, and thus the force of the state was required to extract surplus-value in the form of taxes, the rise of industrial capitalism made the only efficient - and thus the only viable - means of production for most products to be the industrial means of production, which were beyond the means of the ordinary laborer. Thus the rich classes monopolized them, becoming capitalists, and because the proletariat could only sell its labor-power, which by its very nature must cost less than it produces (because the capitalist must make a profit, otherwise he wouldn't be hiring) and thus surplus-value can be extracted.

Most of that is from my recollection of Capital. Marx deals with all of this, he just usually does it in terms that are obsolete in the atmosphere of today's relativism.

I find summaries to be far less of a waste of time.

Yeah, they probably are. But The Working Day should be read by any serious advocate of laissez-faire capitalism.

(I think I see the reference, but I'm not entirely clear as to what you are referring to, mind explaining a bit more?)

But wouldn't the prostitute class have an interest in removing the society that is pushing it into it's position, thus cooridinating it's interests with that of the proletariat as a whole?

Vanguardism, that is, the exaltation of the Party as the way to launch the revolution, is in part a reaction to the reluctance of the masses to launch a revolution. The reason many are reluctant - especially the lumpenproletariat - is that, while they are oppressed and exploited, the most oppressed and exploited of all in fact, the chaos and destruction accompanying a revolution would devastate them precisely because they are so oppressed and destitute.

You don't bite the hand that feeds you, even if you want more.

I'm not, I don't agree with it. Marx's theory of surplus-value should be defended, though.
They are conceptually indistinguishable. You can only talk about "surplus" labor value in terms of... well, labor value.

Marx may have been wrong about the determinants of exchange-value, but they really don't matter for the theory of surplus-value.
Exchange-value does not make sense in the context of the surplus-value theory, because exchange-value is a positive fact. It describes "what I can get" for X. In terms of labor, it describes "what I can get for my labor."

It is a non-critical measure. It measures what exchanges people are actually willing to make. Therefore, it cannot be used to measure any kind of "surplus."

Again, while it is true that an employer may purchase labor for exchange-value (not really the same as price, but close enough) X, but sell it for X+Y, Y cannot be regarded as the "surplus exchange-value" of the labor, because the exchange-value of the labor is, by definition, X!!

By accepting less than that 20$, the only thing that allows you to make a profit, he is either doing you a favor, or is losing out because of his ignorance of the deal.

Let us assume that he knew all about the deal. He is also not "doing me a favor," because he gets a perfectly good value for his work: more, in fact, than he wanted for it.

Let's say he said, "Well if you're going to make $20 off of this, then I should get $20." Obviously, I would not have agreed to this, since then I would not benefit from the arrangement... and neither would he, since he would get nothing.

The only way either of us gets anything is if he agrees to do the job for less than its value for me. Maybe we could agree to something more ($19? 15?), but what we could not agree to is $20, the only price that the theory of surplus value considers "fair."

Of course, maybe you think he could just make his own chair, and paint it... but, he's not very good at making chairs. The only way we make money is by working together, in some form. And that means making an exchange, which must be beneficial from both perspectives: mine, because I get a paint-job for less than it is worth to me; him, because he does a paint-job for more than it is worth to him.

If it is the latter you are indeed exploiting him, because his labor is worth less to him simply because he isn't aware of its true potential value
He has no "true" potential value, only subjective value. As for exchange-value, it is by definition "what he can get for it." It provides no critical term, no way in which to complain. It has no "standard."

The fact of the matter is that your brother is adding $20 to the exchange-value of the product
So? If he were to ask $20 for it, the chair would not be painted, and no one would benefit.

The reason the capitalist makes a profit is, generally, not that their workers are doing them a favor, but rather that there is indeed a difference in bargaining power between workers and capitalists.
That is what I have saying. But one does NOT need the labor theory of value, or the surplus-value theory (which relies on the labor theory) to say this. One merely has to note that the employee is pressed into a position in which the subjective value of his labor is necessarily equivalent to the exchange-value. In other words, his selling price becomes "whatever he can get." Stated otherwise yet again, he is NOT free "not to sell."

Vanguardism, that is, the exaltation of the Party as the way to launch the revolution, is in part a reaction to the reluctance of the masses to launch a revolution. The reason many are reluctant - especially the lumpenproletariat - is that, while they are oppressed and exploited, the most oppressed and exploited of all in fact, the chaos and destruction accompanying a revolution would devastate them precisely because they are so oppressed and destitute.

You don't bite the hand that feeds you, even if you want more.
I don't buy vanguardism. The idea that revolution can be forced from above seems anathma to the ideals behind revolution itself, and have a nasty habit of leading to some totalitarian perversion of the ideals leading to the revolution.

That said, I don't think that the lumpenproletariat can be considered a unique group to the extent that they deserve a separation in class from the proletariat proper, simply because the problems that you described can be applied to any group of workers.

That said, I don't think that the lumpenproletariat can be considered a unique group to the extent that they deserve a separation in class from the proletariat proper, simply because the problems that you described can be applied to any group of workers.

Marx never considered them a "unique group" in the sense of a "class." The first mistake people make with respect to Marx is to think that everyone is a part of either the proletariat or the bourgeoisie. (Yes, he thought history was driving people increasingly into one of these classes, but he never considered them exhaustive.)

The second mistake is to assume that everyone is a part of some "class." The term was not used by Marx simply to "label" people, such that some label must apply to every individual. Rather, historical classes had certain unifying characteristics relating to the means of production. Some people fell, for Marx, in some sense "outside" the class war. (Others represented decaying classes of previous eras.)

Marx never considered them a "unique group" in the sense of a "class." The first mistake people make with respect to Marx is to think that everyone is a part of either the proletariat or the bourgeoisie. (Yes, he thought history was driving people increasingly into one of these classes, but he never considered them exhaustive.)

The second mistake is to assume that everyone is a part of some "class." The term was not used by Marx simply to "label" people, such that some label must apply to every individual. Rather, historical classes had certain unifying characteristics relating to the means of production. Some people fell, for Marx, in some sense "outside" the class war. (Others represented decaying classes of previous eras.)
Marx clearly did think of the lumpenproletariat as a separate class (see: the german ideology), I just don't think that he's correct in separating them out from the proletariat as a whole.

Exchange-value does not make sense in the context of the surplus-value theory, because exchange-value is a positive fact. It describes "what I can get" for X. In terms of labor, it describes "what I can get for my labor."

It is a non-critical measure. It measures what exchanges people are actually willing to make. Therefore, it cannot be used to measure any kind of "surplus."

Exchange-value is actually precisely what Marx uses to outline his theory of surplus-value. Exchange-value in the terms of the Labor Theory of Value, but thar isn't necessary for it to work.

According to the Marxist interpretation of the LTV there is a certain "price" for labor, say, $1 per labor-hour. All commodities, on average, cost the amount of money equal to the amount of labor-time put into them times that price. Thus, if a given bench took 10 hours to produce from raw materials that took 90 hours to be extracted, assembled, etc., keeping to the $1 ratio the bench costs $100. Labor costs the quantity of labor required to reproduce it - that is, the amount of labor put into its means of substinence. If all the necessities of the laborer for one day can be produced in an average of four hours, then labor can be bought at a rate of $4 a day. But the trick of the capitalist is that he can make the laborer work longer than four hours. If he desires, the laborer can work ten hours instead, build the bench from the raw materials, and thus create a commodity worth $10 more than it did before he began. The capitalist pockets the extra $6 as surplus-value.

The values of the bench ($100), of the raw materials ($90), of the difference between the two ($10), and of the day's labor ($4) are all exchange-values. The only value that is not an exchange-value is the $1 per labor-hour, and that value is superfluous. We can forget about it entirely. Surplus-value remains true - the laborer is still producing a value of $10 (in exchange-value), he still only receives $4 as wages, and the capitalist still pockets $6 for doing absolutely nothing.

The remainder of your post is not really a refutation of surplus-value, but rather of surplus-value's immorality. That is a more subjective question, and one where bargaining power must indeed play a role. Marx, illustrating as he did the horrendous atrocities inflicted upon the British proletariat, likely saw the answer as almost self-evident.

I don't buy vanguardism. The idea that revolution can be forced from above seems anathma to the ideals behind revolution itself, and have a nasty habit of leading to some totalitarian perversion of the ideals leading to the revolution.

I don't either, I reject it for exactly the reasons you do. I was just pointing out the historical accuracy of Marx's predictions, and their consequences.

Marx clearly did think of the lumpenproletariat as a separate class (see: the german ideology), I just don't think that he's correct in separating them out from the proletariat as a whole.

Where in The German Ideology does he define the lumpenproletariat as a historical class? I am aware of his definition in Chapter III, in which he criticizes the notion of the "proletariat" as merely "the poor", and separates the proletariat proper from the lumpenproletariat--but his aim here is to properly define the proletariat, not to dignify the lumpenproletariat with the status of a class. I also see nothing in The German Ideology to contradict his claim in the Eighteenth Brumaire that the lumpenproletariat is "the refuse of all classes."

Exchange-value is actually precisely what Marx uses to outline his theory of surplus-value.
No, it's not. If it were, Marx could not refer to the surplus as "unpaid labor," because the laborer is paid the same wage for all hours that he works. The only way to say that the laborer "actually" works up to the point of subsistence "and then some" is to assign a value to his labor other than the exchange-value.

Marx says that labor costs the quantity of labor required to reproduce it, as you say. You say that he assumes, perhaps, that all the necessities of the laborer for one day can be produced in an average of four hours, but he works ten, then the remaining six hours are surplus.

But this does not make any sense whatsoever.

Imagine a worker who has no debt and no savings. He lives at a subsistence level on precisely what he makes in his 10 hour day.

Now, the fact of the matter is clearly that it takes him 10 hours to make enough money (exchange-value) to buy the things that are necessary for his subsistence.

Marx makes the "surplus" by saying, "Ah, but it only takes some other laborer 4 hours to produce the wheat and butter that he eats (or whatever else he needs for subsistence). Therefore, he works six hours more than he must to produce the same value."

The only way Marx can make this "equivalence" between the value of the worker's necessities and the value of his labor is to assume that all labor has the same value, and that all value comes from labor.

The surplus-value theory of exploitation derives from this equivalence, and in no other way.

No, it's not. If it were, Marx could not refer to the surplus as "unpaid labor," because the laborer is paid the same wage for all hours that he works. The only way to say that the laborer "actually" works up to the point of subsistence "and then some" is to assign a value to his labor other than the exchange-value.

Right - the difference between the exchange-value of the raw materials and the exchange-value of the final product, that is, $10. That exchange-value isn't technically created by labor according to the modern conception of value, but it's still the direct result of the laborer's labor.

Marx says that labor costs the quantity of labor required to reproduce it, as you say. You say that he assumes, perhaps, that all the necessities of the laborer for one day can be produced in an average of four hours, but he works ten, then the remaining six hours are surplus.

But this does not make any sense whatsoever.

Imagine a worker who has no debt and no savings. He lives at a subsistence level on precisely what he makes in his 10 hour day.

Now, the fact of the matter is clearly that it takes him 10 hours to make enough money (exchange-value) to buy the things that are necessary for his subsistence.

Marx makes the "surplus" by saying, "Ah, but it only takes some other laborer 4 hours to produce the wheat and butter that he eats (or whatever else he needs for subsistence). Therefore, he works six hours more than he must to produce the same value."

The only way Marx can make this "equivalence" between the value of the worker's necessities and the value of his labor is to assume that all labor has the same value, and that all value comes from labor.

The surplus-value theory of exploitation derives from this equivalence, and in no other way.

Look at this way: the capitalist is paying the worker of 40 cents an hour, even though the worker is producing $1 worth of commodities an hour. If the capitalist were not exploiting him and he received the full value of his labor, he would only need to work four hours to attain an equivalent wage. Thus, without even introducing the Labor Theory of Value, there is still surplus-labor - the six hours after the worker has produced that $4 - and surplus-value - the $6 the worker produces with his surplus-labor.

Soheran:

I feel I should add that in your extended example, the $1 cost for labor that you regard as "superfluous" not only permeates every other value in your post, but encompasses the assumption that all labor has the same value.

You'll note that this line explicitly assumes that all labor has the same value: "Thus, if a given bench took 10 hours to produce from raw materials that took 90 hours to be extracted, assembled, etc., keeping to the $1 ratio the bench costs $100."

So does this one: "If all the necessities of the laborer for one day can be produced in an average of four hours, then labor can be bought at a rate of $4 a day."

Thus, rather than providing real exchange-values, you derive the exchange values from a labor-value, which you assume to be objective and universal. This is precisely what Marx does, and it is why his surplus-value theory of exploitation requires the labor-theory of value.

You are correct in asserting that the actual value ($1 in this case) is arbitrary. But the fact of the matter is that you cannot make your argument without assuming that (whatever it is) it is the same for all kinds of labor, in all places, to all employers.

You assume an objective labor-value, but there is none.

Soheran:

I feel I should add that in your extended example, the $1 cost for labor that you regard as "superfluous" not only permeates every other value in your post, but encompasses the assumption that all labor has the same value.

You'll note that this line explicitly assumes that all labor has the same value: "Thus, if a given bench took 10 hours to produce from raw materials that took 90 hours to be extracted, assembled, etc., keeping to the $1 ratio the bench costs $100."

So does this one: "If all the necessities of the laborer for one day can be produced in an average of four hours, then labor can be bought at a rate of $4 a day."

Thus, rather than providing real exchange-values, you derive the exchange values from a labor-value, which you assume to be objective and universal. This is precisely what Marx does, and it is why his surplus-value theory of exploitation requires the labor-theory of value.

You are correct in asserting that the actual value ($1 in this case) is arbitrary. But the fact of the matter is that you cannot make your argument without assuming that (whatever it is) it is the same for all kinds of labor, in all places, to all employers.

You assume an objective labor-value, but there is none.

Of course I was deriving it from the labor-value, because I was repeating how Marx did it with the LTV in order to prove my point. But that doesn't matter, because the specific value of the goods is irrelevant. What matters is that there is a difference between what the capitalist pays the laborer and what he gets from the laborer's labor - that difference being his profits, or surplus-value, and the reason, in the Marxist sense, that he is exploiting the laborer.

Look at this way: the capitalist is paying the worker of 40 cents an hour, even though the worker is producing $1 worth of commodities an hour.
Yes, but has no critical edge to it (and it is not Marx's argument).

You are merely describing the circumstances of capitalist exchange--which is appropriate because exchange-value is purely descriptive.

The capitalist has capital, or access to the market, so that he is in a position to sell the products of the worker's labor. Judging market prices, he decides that the subjective value of labor to him is $1/per hour... We assume that he will pay anything less than $1/per hour (if he has to--naturally he prefers to pay as little as possible).

The worker only has his labor, and he would like to sell it. He decides that he will be willing to work for anything at or above $.40/hour.

If $.40/hour winds up being the exchange-value of the labor, nothing in this description tells me how the laborer was "exploited." He received a wage whose subjective value was the same as the value of his labor.

(As I have already said, we realize that the relationship is exploitative when we analyze the power differential and understand that most worker's "will take what they can get." But this is a political analysis, not an economic one.)

While you can say that the laborer would make more money if he owned the means of production, that is just to describe how things would be different in a different world: it does not explain why that world is better.

Speaking in terms of exchange-values, it is simply never possible to say "The exchange-value I received was too low, because it does not equal the exchange value of my product." I have no basis to insist that they should be the same; exchange value is descriptive, not critical.

If the capitalist were not employing him and he received the full value of his labor, he would only need to work four hours to attain an equivalent wage.

Again, that's true. But it does not explain why it is "not fair" that the capitalist has the means of production and the laborer does not. It only describes how things would be different for the laborer if he did, in fact, control the means of production. It says nothing about why he should.

Thus, without even introducing the Labor Theory of Value, there is still surplus-labor - the six hours after the worker has produced that $4 - and surplus-value - the $6 the worker produces with his surplus-labor.

No, you still need the labor theory of value, you just leave its assumptions unstated. It is the only way to make objective equivalence between the value of the labor and the value of the product. And it fails.

Of course I was deriving it from the labor-value, because I was repeating how Marx did it with the LTV in order to prove my point. But that doesn't matter, because the specific value of the goods is irrelevant.

Sure, the specific value of the goods is irrelevant... The problem is that you did not use exchange-values at all (which can only be discovered, they cannot be "derived"). You assumed a uniform value to labor, and then extrapolated from that value the proportions in prices of various commodities. This is an invalid assumption.

What matters is that there is a difference between what the capitalist pays the laborer and what he gets from the laborer's labor

Of course there is!! If there were never a (subjective) difference between price and value, no exchanges would ever take place. But this is purely descriptive. It fails to explain why the laborer should care.

Again, the laborer might say to himself, "Gee, if I owned the means of production, I would get more money." That is probably true. But it does nothing to explain why the exchange relation between the capitalist and the employee is exploitative.

To do that, one needs to show that the capitalist has power, which the worker does not. This is political, not economic.

In other words, if employee and employer meet on equal footing to bargain for a price beneficial to both of them, how can you criticize the fact that one owns and the other works?

Look at it this way. I build a lawnmower. It's mine. Unfortunately, I have an accident and it is now difficult for me to push the weight of the lawnmower... but people still have lawns to be mowed, and I figure I can make some money.

So, I hire one of my friends to mow lawns. He has another job, so he's not going to starve if he doesn't get to do this... He just figures (like I do) that it would be a decent way to make a few bucks.

For every lawn he mows, he is paid $20. We agree to split the money, so we each get $10.

According to your theory, I am exploiting him, because he should be getting $20 for his labor. And in fact, it is true that if he bought my lawnmower (or took it), he would be making $20 on every lawn. Unfortunately, he does not have enough money to convince me to sell the lawnmower...

Is our relationship unfair? Should he declare that it is unjust that I possess the means of production, and would he be right to take it from me?

No. But the reason has nothing to do with the economics of the situation, and everything to do with the fact that we are equal partners, with equal bargaining positions.

EDIT: For the sake of the argument, lets say I built my mower very very quickly (a matter of hours), so whatever "labor value" I introduced is quickly repaid... Thus, my only stake in the relationship is ownership.

AnarchyeL - Yes, I am aware that I am not saying why capitalism is wrong through my argument. Marx didn't either, his version of the Theory of Surplus-Value is descriptive, just like mine. The differences are in semantics, not in substance.

I do think, however, that most moral systems have a problem with a mode of production in which the money attained from selling the proceeds of labor does not go entirely to the laborer. In fact, the basic idea that this should be the case is the basis of the liberal argument for private property and capitalism.

No, you still need the labor theory of value, you just leave its assumptions unstated. It is the only way to make objective equivalence between the value of the labor and the value of the product. And it fails.

No, I don't need it at all. I just need the understanding that the laborer made those raw materials - worth $90 - into a bench - worth $100 - without any contribution by the capitalist, yet he gets merely two-fifths of the proceeds.

AnarchyeL - Yes, I am aware that I am not saying why capitalism is wrong through my argument. Marx didn't either, his version of the Theory of Surplus-Value is descriptive, just like mine.

No back-pedaling. You both use the normative term "exploitation." You do not merely say, "the capitalist makes a profit from the transaction;" you insist that he pays the worker "less than he is worth."

The differences are in semantics, not in substance.

I disagree. You seem to think that any exchange is exploitative in which one party makes a profit... but the fact of the matter is that in free exchange both parties profit, because value is subjective. Exploitation only occurs when one party to the exchange profits by compelling the other to accept a price that he (the laborer) considers unfair. There is no "objective" measure of fairness in a transaction.

Imagine you go to a garage sale and see someone purchase an old bicycle for $100. You happen to know that similar bikes are selling for $90. Was he treated unfairly? No. He might have gotten a better deal had he shopped around more, but that does not mean the deal he got was "unfair."

Similarly, workers might get a "better deal" under different economic conditions... but that, in itself, does not mean the existing conditions are "unfair." That normative analysis demands an understanding of power relations.

I do think, however, that most moral systems have a problem with a mode of production in which the money attained from selling the proceeds of labor does not go entirely to the laborer.
Most? Really?

Damn, I wish. We might not have so much trouble convincing people that capitalism is corrupt!

In fact, the basic idea that this should be the case is the basis of the liberal argument for private property and capitalism.
Really? I have not seen it in this form. I have seen the argument, a la John Locke, that the origins of property lie in acquisition through personal labor, but as soon as he introduces money (via "tacit consent") he concludes that people acquiesced to the exchange conditions of modern class-divided England.

From then on, the liberal argument has simply insisted that my labor is my own, and I may sell it for whatever price I choose. It says nothing about what this price should be--in fact, this argument (for as long as it lasted in its pure form) was the basis of the legal case against maximum hours and minimum wage legislation in the United States... because laborers, it was assumed, sold their labor voluntarily. It took the "sociological jurisprudence" of the later Supreme Court to overturn these decisions by concluding that laborers and employers are not "equal" partners to the relationship.

No, I don't need it at all. I just need the understanding that the laborer made those raw materials - worth $90 - into a bench - worth $100 - without any contribution by the capitalist, yet he gets merely two-fifths of the proceeds.

The fact that he gets very little (two-fifths) may suggest that something unfair is going on, but it does not prove it. If the worker is treated fairly, and he is happy with what he gets, where is the problem?

The problem does not derive from the economic mode of the relationship, or even from the relative benefit accruing it each partner. It derives, instead, from the fact that this relationship is fundamentally unequal.

Again, I don't know why you insist on this so desperately. The labor theory of value, and the surplus-value theory of exploitation which it undergirds, have been roundly discredited by economists of every stamp. Leftist economists realized long ago that these theories are a) wrong; and b) we don't need them.

No back-pedaling. You both use the normative term "exploitation." You do not merely say, "the capitalist makes a profit from the transaction;" you insist that he pays the worker "less than he is worth."

Yes, because a portion of the proceeds of the laborer's labor are being essentially stolen by the capitalist. But that is my judgement as to the conclusions of the Theory of Surplus-Value, not an element of the system in itself. It is based off my concept of justice, with like all systems of ethics is subjective.

I disagree. You seem to think that any exchange is exploitative in which one party makes a profit... but the fact of the matter is that in free exchange both parties profit, because value is subjective. Exploitation only occurs when one party to the exchange profits by compelling the other to accept a price that he (the laborer) considers unfair. There is no "objective" measure of fairness in a transaction.

But the only reason the laborer would consider the price "fair" is if:

1. He couldn't get anything better elsewhere, a result of the distortion in power;
2. He wasn't aware that a better deal was possible, an aspect of the distortion in power.

The inequity in power is already implied by the nature of the Theory of Surplus-Value.

Imagine you go to a garage sale and see someone purchase an old bicycle for $100. You happen to know that similar bikes are selling for $90. Was he treated unfairly? No. He might have gotten a better deal had he shopped around more, but that does not mean the deal he got was "unfair."

Well, it depends. If the person selling a bicycle had bought it beforehand for the cheaper price and was taking advantage of the purchaser, that is indeed exploitation, exploitation of the purchaser's ignorance. That is the manner of the capitalist. If the seller is just as ignorant as the buyer, it's just an innocent error, and no exploitation is involved.

Similarly, workers might get a "better deal" under different economic conditions... but that, in itself, does not mean the existing conditions are "unfair." That normative analysis demands an understanding of power relations.

If they could get a better deal without depriving anyone else of their just deal, it does indeed mean that the existing conditions are "unfair," especially when someone undeserving profits from the current situation.

Really? I have not seen it in this form. I have seen the argument, a la John Locke, that the origins of property lie in acquisition through personal labor, but as soon as he introduces money (via "tacit consent") he concludes that people acquiesced to the exchange conditions of modern class-divided England.

Right, John Locke, I was thinking of him. Don't you think anyone accepting the ethical argument behind Locke's political philosophy would have a problem with the extraction of surplus-value? It's an effective violation of the spirit if not the letter, even if it is based contractually, and the only sensible conclusion to make is that it does indeed rest on an inequality in power.

The fact that he gets very little (two-fifths) may suggest that something unfair is going on, but it does not prove it. If the worker is treated fairly, and he is happy with what he gets, where is the problem?

The fact that the worker is "happy" does not make the situation just, all it does is make the injustice less urgent.

The problem does not derive from the economic mode of the relationship, or even from the relative benefit accruing it each partner. It derives, instead, from the fact that this relationship is fundamentally unequal.

An inequality which expresses itself as the extraction of surplus-value. The only possible way a capitalist can profit is if he has some sort of unfair leverage over the laborer.

Again, I don't know why you insist on this so desperately. The labor theory of value, and the surplus-value theory of exploitation which it undergirds, have been roundly discredited by economists of every stamp. Leftist economists realized long ago that these theories are a) wrong; and b) we don't need them.

In terms of practicality, because it is the best rebuttal to the right-wing argument that class privilege is based on "labor." Also, because I agree with it, and do not limit my arguments to ones which I think are most helpful to my cause.

Yes, because a portion of the proceeds of the laborer's labor are being essentially stolen by the capitalist.

Forget the "facts" for a second.

We both agree that the capitalist does, in fact, exploit the laborer. The question is whether the theory of surplus labor-value proves that. It does not, because it rests on an invalid assumption of objective labor-value.

But the only reason the laborer would consider the price "fair" is if:

1. He couldn't get anything better elsewhere, a result of the distortion in power;

No. Being able to get a better deal elsewhere, or under different circumstances, does NOT imply exploitation or an unfair deal.

I can buy cheap DVDs at Wal-Mart. That does not mean that my local movie store is ripping me off. (They may be... or, Wal-Mart may be undercutting their prices by any number of methods with which they simply cannot compete.)

2. He wasn't aware that a better deal was possible, an aspect of the distortion in power.

No, that may be an aspect of the power differential. That is something that you would have to prove... but in so doing you would not once need to mention anything about surplus labor.

The inequity in power is already implied by the nature of the Theory of Surplus-Value.

No, Marx thought that the Theory of Surplus Value proved that a power differential must exist--otherwise, why would laborers work for less than what they are worth?

He does not "imply" it, or assume it... The power differential is what the theory sets out to prove. It fails, but that does not mean that the power differential cannot be proven by other means.

Well, it depends. If the person selling a bicycle had bought it beforehand for the cheaper price and was taking advantage of the purchaser, that is indeed exploitation, exploitation of the purchaser's ignorance.

How is it exploitation? Here's the scenario: I buy a used bike for $90, thinking my son might want it. It turns out, he doesn't. So, I decide to sell it. But, having taken the trouble to go out and find the bike, I'm not happy selling it for the $90 I bought it for. I want at least $100, and I'm not happy selling for less.

Now, it may be that no one will buy for $100... perhaps because they can get bikes elsewhere for less. I may have to wait for the market to change. But as it happens, someone comes along and (for whatever reason) agrees to pay me $100 for my bike. Maybe it's worth paying a premium not to expend the effort shopping around... maybe he considers it a "risk" to wait and not take this price... or maybe he just doesn't think (however wrong he may be) that a better price is available.

All we can tell from his decision to pay the $100 is that the bike must be worth at least $100 to him. It is not incumbent on me to say, "by the way, down the street you could get one for $90" any more than my local video store should be sending customers to Wal-Mart.

If they could get a better deal without depriving anyone else of their just deal, it does indeed mean that the existing conditions are "unfair," especially when someone undeserving profits from the current situation.

But what makes the capitalist "undeserving"? All we know objectively is that a transaction takes place. If we assume that everyone is an equal party, we must conclude that the transaction was advantageous to all.

As for "undeserving"... the capitalist replies that he accepted all the "risk of loss" as the entrepreneur. Whatever you may think of this argument, it is not prima facie unfair. Indeed, the employee may say, "Yes, I like it that way. I am happy with the wage I get, and the fact that I do not have to risk what I have to get more."

The problems that we both want to criticize only come into play when we recognize that the bargain is in fact unfair. But we cannot tell that it is unfair simply from the economics--simply from the fact that the capitalist makes a profit. Indeed, we expect him to make a profit--otherwise he would not have made the exchange.

Again, Marx's surplus-labor theory purports to be evidence of exploitation. It says, "Look, the capitalist makes more than what he pays the worker! It must be exploitation!" But it rests on the objective value of labor. When this fails, so does the Marxist "proof." Exploitation is still there, but it must be proven by other means.

Right, John Locke, I was thinking of him. Don't you think anyone accepting the ethical argument behind Locke's political philosophy would have a problem with the extraction of surplus-value?

They would have to, if labor-value were objective. Since it is not, they have nothing to complain about.

It's an effective violation of the spirit if not the letter,
Given that the "spirit" of Locke's thesis was a justification for bourgeois ownership, I find that highly unlikely.

An inequality which expresses itself as the extraction of surplus-value. The only possible way a capitalist can profit is if he has some sort of unfair leverage over the laborer.

That's simply not true. The economic role of the entrepreneur can, without contradiction, be read as solving several economic problems of the laborer. One is organization in complex production processes. Another is the problem of the shirker. Another is the assumption of risk.

It may take 100 workers to produce product X, with only a 60% chance that it will sell. 30 of them may say, "cool, let's go for it." The other 70 may say, "no, we'd rather make do with what we have than risk losing the labor/resources it would take to produce product X." If an entrepreneur comes along and says, "look, I'll pay all of you a set amount for making product X, as long as I get to keep the difference between what I pay you and what I sell it for," the workers may be perfectly happy to take this deal... and it is, by all appearances, a very fair contract.

There may be other ways to solve these problems. Some of them may result in the workers getting a better deal. But as long as they make their existing deal under conditions of equality, there is nothing inherently wrong with it.

As always, there is only something wrong with it where unequal power is involved. But that means you have to prove that there is unequal power, not assume that there is because of the results of the exchange.

In terms of practicality, because it is the best rebuttal to the right-wing argument that class privilege is based on "labor."
A much better argument would be to deconstruct Locke's original argument and show that class privilege is not, after all, based on labor. There are several ambiguities in his arguments that Leftists should pick up on, but despite the guidance of C.B. Macpherson they have largely refused to do so.

It does not help to combat one fraudulent theory with another!!

Also, because I agree with it, and do not limit my arguments to ones which I think are most helpful to my cause.

If you agree with it, then you are confused. No economist (Left or Right) still subscribes to this theory. It is untenable.

Yes, capitalists profit from the entrepreneurial relation. That does not prove that it is unjust. For this proof, you need the fact that the capitalist "bargains" from a position of power... and to derive this from the surplus-value theory, then to take it in support of this theory, is the very definition of a circular argument.

Yeah, they probably are. But The Working Day should be read by any serious advocate of laissez-faire capitalism.

I haven't even read any classics on the support of laissez-faire.

Maybe after I have read Locke's Treatises or Smith's Wealth of Nations I can read some Marx.

Until then, I will just have to learn as I go along.

Maybe after I have read Locke's Treatises
When you do, make sure you read Macpherson's Introduction to the Second Treatise.

You can probably skip the first treatise. It has some interesting points, as when Locke essentially admits that his theory of inheritance rests on the assumption that it is a universal practice (which, of course, it is not... certainly not when he wrote). But generally, it is unimportant and rather dull.

or Smith's Wealth of Nations I can read some Marx.
Yes, everyone should read the Wealth of Nations. In the context of this discussion, two things are especially interesting:

1) Smith invents the labor theory of value that Marx later picks up and uses to develop the theory of profit that I have been criticizing for several pages. They are both wrong.

2) Smith advocated capitalist production not on any notion of "natural right," as Locke did... but on the argument that it would be a system tending to produce desirable social ends. He thought that any society should choose the capitalist mode of production as a positive legal/economic arrangement conducive to the betterment of all.

This is a much better argument than Locke's. It also leaves the door wide open to public regulation of the market when (as it turns out) it does NOT always tend to produce socially desirable results. Moreover, it leaves the fundamental economic choice to each society: Smith recommends capitalism, he does not insist that it is "morally" right.

Interestingly, Andrew Carnegie reiterates this argument in his late 19th-century article "On Wealth." He encourages capitalists to give back generously to their communities, on the grounds that it is a community choice (not natural right) that puts them in a position to earn the wealth that they do.

EDIT: If I recall correctly, for the same reason he supports a hefty tax on inheritance. (In general, theories of economics as a positive rather than a natural relation have difficulty justifying inheritance... Even Locke backs down on this point, and admits that the only reason he thinks inheritance must be natural is that "the practice is universal." Since it is not, his argument breaks down, too.)

When you do, make sure you read Macpherson's Introduction to the Second Treatise.

You can probably skip the first treatise. It has some interesting points, as when Locke essentially admits that his theory of inheritance rests on the assumption that it is a universal practice (which, of course, it is not... certainly not when he wrote). But generally, it is unimportant and rather dull.


Yes, everyone should read the Wealth of Nations. In the context of this discussion, two things are especially interesting:

1) Smith invents the labor theory of value that Marx later picks up and uses to develop the theory of profit that I have been criticizing for several pages. They are both wrong.

2) Smith advocated capitalist production not on any notion of "natural right," as Locke did... but on the argument that it would be a system tending to produce desirable social ends. He thought that any society should choose the capitalist mode of production as a positive legal/economic arrangement conducive to the betterment of all.

This is a much better argument than Locke's. It also leaves the door wide open to public regulation of the market when (as it turns out) it does NOT always tend to produce socially desirable results. Moreover, it leaves the fundamental economic choice to each society: Smith recommends capitalism, he does not insist that it is "morally" right.

Interestingly, Andrew Carnegie reiterates this argument in his late 19th-century article "On Wealth." He encourages capitalists to give back generously to their communities, on the grounds that it is a community choice (not natural right) that puts them in a position to earn the wealth that they do.

Honestly, summaries of thought processes like this are about as close to reading the authors as I will get. I have never put too much stock in the opinions of philosophers in the first place. I prefer my own.

Considering that I have argued the merits of capitalism and natural rights for about a year and a half, yet I haven't even touched either of those books, it is doubtful that I will read them. I have a case of ADHD that renders me useless at anything other than video games and short bursts of pseudo-intellectualism.

So, until the wiring in my brain allows me to concentrate on print, and I learn a little humility, I will continue to argue points from either my own brain or my arse, and not from education. If I look like a fool at times, so be it.


By the way, what has brought you to NS so consistently lately?

If I recall correctly, for the same reason he supports a hefty tax on inheritance. (In general, theories of economics as a positive rather than a natural relation have difficulty justifying inheritance... Even Locke backs down on this point, and admits that the only reason he thinks inheritance must be natural is that "the practice is universal." Since it is not, his argument breaks down, too.)

I argue for inheritance tenuously on the natural right for property disposal. When one has property rights, it carries the right to transfer, and I view inheritance as the transfer of property upon the moment of death, not as an after death transaction.

No. Being able to get a better deal elsewhere, or under different circumstances, does NOT imply exploitation or an unfair deal.

I can buy cheap DVDs at Wal-Mart. That does not mean that my local movie store is ripping me off. (They may be... or, Wal-Mart may be undercutting their prices by any number of methods with which they simply cannot compete.)

Fair enough. I was assuming equality of efficiency.

No, Marx thought that the Theory of Surplus Value proved that a power differential must exist--otherwise, why would laborers work for less than what they are worth?

Precisely, that is what I said.

How is it exploitation? Here's the scenario: I buy a used bike for $90, thinking my son might want it. It turns out, he doesn't. So, I decide to sell it. But, having taken the trouble to go out and find the bike, I'm not happy selling it for the $90 I bought it for. I want at least $100, and I'm not happy selling for less.

Now, it may be that no one will buy for $100... perhaps because they can get bikes elsewhere for less. I may have to wait for the market to change. But as it happens, someone comes along and (for whatever reason) agrees to pay me $100 for my bike. Maybe it's worth paying a premium not to expend the effort shopping around... maybe he considers it a "risk" to wait and not take this price... or maybe he just doesn't think (however wrong he may be) that a better price is available.

All we can tell from his decision to pay the $100 is that the bike must be worth at least $100 to him. It is not incumbent on me to say, "by the way, down the street you could get one for $90" any more than my local video store should be sending customers to Wal-Mart.

You're not selling to make a profit, you're selling to correct an error. If you are selling to make a profit, and your costs are equivalent to that of the store down the street, you are indeed ripping off the customer by taking advantage of his ignorance.

But what makes the capitalist "undeserving"? All we know objectively is that a transaction takes place. If we assume that everyone is an equal party, we must conclude that the transaction was advantageous to all.

But we don't need to assume that. We don't need to assume any opposing premise, either. We just need to look at what is, and it becomes clear that in fact the relationship is unequal. Why does the capitalist make a profit if he does no labor?

As for "undeserving"... the capitalist replies that he accepted all the "risk of loss" as the entrepreneur. Whatever you may think of this argument, it is not prima facie unfair. Indeed, the employee may say, "Yes, I like it that way. I am happy with the wage I get, and the fact that I do not have to risk what I have to get more."

The problems that we both want to criticize only come into play when we recognize that the bargain is in fact unfair. But we cannot tell that it is unfair simply from the economics--simply from the fact that the capitalist makes a profit. Indeed, we expect him to make a profit--otherwise he would not have made the exchange.

Here, you are not refuting the Theory of Surplus-Value, you are attempting to justify its consequences: yes, maybe the capitalist is essentially taking the products of someone else's labor, but he has a right to do so, because he's assuming the risk.

Again, Marx's surplus-labor theory purports to be evidence of exploitation. It says, "Look, the capitalist makes more than what he pays the worker! It must be exploitation!" But it rests on the objective value of labor. When this fails, so does the Marxist "proof." Exploitation is still there, but it must be proven by other means.

No, it doesn't prove that there is anything wrong with what the capitalist is doing, granted.

Given that the "spirit" of Locke's thesis was a justification for bourgeois ownership, I find that highly unlikely.

Right, but people who don't happen to be rich English aristocrats agree with Locke because he appeals to their sense of ethics, not because his theories are convenient justifications for their class privilege.

That's simply not true. The economic role of the entrepreneur can, without contradiction, be read as solving several economic problems of the laborer. One is organization in complex production processes. Another is the problem of the shirker. Another is the assumption of risk.

It may take 100 workers to produce product X, with only a 60% chance that it will sell. 30 of them may say, "cool, let's go for it." The other 70 may say, "no, we'd rather make do with what we have than risk losing the labor/resources it would take to produce product X." If an entrepreneur comes along and says, "look, I'll pay all of you a set amount for making product X, as long as I get to keep the difference between what I pay you and what I sell it for," the workers may be perfectly happy to take this deal... and it is, by all appearances, a very fair contract.

There may be other ways to solve these problems. Some of them may result in the workers getting a better deal. But as long as they make their existing deal under conditions of equality, there is nothing inherently wrong with it.

As always, there is only something wrong with it where unequal power is involved. But that means you have to prove that there is unequal power, not assume that there is because of the results of the exchange.

Okay, fair enough, I will grant that the Theory of Surplus-Value does not in itself prove exploitation. On the other hand, the reasons you present here have nothing to do with the initial disagreement - that it didn't work because it was founded on the Labor Theory of Value.

A much better argument would be to deconstruct Locke's original argument and show that class privilege is not, after all, based on labor. There are several ambiguities in his arguments that Leftists should pick up on, but despite the guidance of C.B. Macpherson they have largely refused to do so.

It does not help to combat one fraudulent theory with another!!

There are lots of problems with the ethical advocacy of a right to private property, but it's much easier to use a simple presentation of surplus-value - like that contained in Lafargue's essay Simple Socialist Truths - than to delve into philosophy, which is only fun when you're arguing with intelligent people, anyway.

I have a case of ADHD that renders me useless at anything other than video games and short bursts of pseudo-intellectualism.
Well, perhaps I will collaborate with my game-making friends to produce: "Property Rights: The Video Game."

By the way, what has brought you to NS so consistently lately?

Consistently? Maybe over the last day or two, since Spring Break started. Otherwise, I feel I've been away more than I've been here... Lots of work to do.

Technically, I should be grading some 60 midterms right now... oh well.

I argue for inheritance tenuously on the natural right for property disposal. When one has property rights, it carries the right to transfer, and I view inheritance as the transfer of property upon the moment of death, not as an after death transaction.

Yes, if you buy a natural right to property disposal, it follows that death should be no barrier to your right.

Well, perhaps I will collaborate with my game-making friends to produce: "Property Rights: The Video Game."

Yeah, get right on it. It should sell like hotcakes.

Consistently? Maybe over the last day or two, since Spring Break started. Otherwise, I feel I've been away more than I've been here... Lots of work to do.

Technically, I should be grading some 60 midterms right now... oh well.

It seems like the last couple of weeks you have posted pretty regularly.

Yes, if you buy a natural right to property disposal, it follows that death should be no barrier to your right.

I guess you are making a jab at the idea of natural property rights.

However, the transfer takes place at the instant before death. Transactions can be set to be made at the occurance of some event in order to prevent the necessity of constant monitoring of events. This would be no different.

I only go with that, of course, because I have a feeling that the reversion of property rights to the state is a very bad idea. The only worse idea would have the property rights to be abandoned.

You're not selling to make a profit, you're selling to correct an error.

First, any time I benefit from the sale, I make a "profit."
Second, why should the motive for the sale make a difference? Either the deal is fair, or not.

If you are selling to make a profit, and your costs are equivalent to that of the store down the street, you are indeed ripping off the customer by taking advantage of his ignorance.

Why? For all I know, he is well aware of the cheaper price down the street. Maybe he wants to buy from me because he lives closer to me, and he can just ride the bike home. Maybe he is afraid that by the time he gets down the street, the cheaper bike will have sold. Maybe... maybe any number of things. Should I have to say, "by the way, did you know you can get this cheaper down the street" before I sell him my bike? Is it exploitation if I do not?

But we don't need to assume that [everyone is an equal party]. We don't need to assume any opposing premise, either.
No, we don't. But the problem is that our conclusion depends on our assumption.

If we assume that everyone is an equal party, then we conclude that they would only make a mutually beneficial exchange. Therefore, although we might not have made the same deal, we have to conclude that the deal is fair.

If we assume that the parties are unequal, then we conclude that one of them (the capitalist) is making a profit at the expense of the worker.

We just need to look at what is, and it becomes clear that in fact the relationship is unequal.
But we cannot tell "what is." All we see is a transaction. The fact that we think one party made out better than the other reflects our values, but the only values that matter in the exchange are the values of the worker, and the values of the capitalist.

Why does the capitalist make a profit if he does no labor?
This is the essential question generated by the labor theory of value: because you assume (incorrectly) that value only comes from labor, you conclude that only the laborer has a right to the value.

Again, your argument rests on the erroneous labor theory of value. You will never get past this flaw.

Here, you are not refuting the Theory of Surplus-Value, you are attempting to justify its consequences: yes, maybe the capitalist is essentially taking the products of someone else's labor, but he has a right to do so, because he's assuming the risk.
No, what I am refuting is the labor theory of value. Value is produced not simply through labor on raw materials, but through the coordinating efforts of the entrepreneur.

If farmers in Kansas have hay that they will sell for $5 a bale, and ranchers in Texas will buy hay for $6 a bale, but neither of them knows how to find the other... then no one gets what they want. One role of the entrepreneur is to connect the dots. If he buys hay at the price the farmers want, and sells it to the ranchers at the price they are willing to pay, both the farmers and the ranchers get what they want... and they are perfectly happy to let the entrepreneur take the $1/bale of profit that results from the transaction. It is his award for solving their economic problem.

Right, but people who don't happen to be rich English aristocrats agree with Locke because he appeals to their sense of ethics, not because his theories are convenient justifications for their class privilege.
In my experience, non-bourgeois who agree with Locke do so because they misread him. Not only did he think the purpose of the state is the defense of bourgeois property, but as a result he thought it would be contradictory to allow non-landholders to vote. Workers are "in but not of" the social contract.

On the other hand, the reasons you present here have nothing to do with the initial disagreement - that it didn't work because it was founded on the Labor Theory of Value.
On the contrary, they have everything to do with the labor theory of value!! All of those "services" that the entrepreneur provides are his "contribution" to the exchange. Much more goes into generating wealth than simply laboring on raw materials.

This is something that would not actually change under communist administration. There are essentially two ways that communists could organize production:

1) They elect a (probably temporary) manager or managers to oversee production, the acquisition of resources and capital, and the trade/distribution of products. These managers would, of course, be paid--either in wages or in the shared profits of the community. But they do not labor, so why should they get anything?

2) The workers collectively manage their own affairs. This activity would necessarily take time away from their labors, and they would inevitably be less productive. Suddenly they would see the profits they hoped to "reclaim" from the capitalist evaporate... which makes sense, since the capitalist entrepreneur, as manager, was making a contribution to the product.

None of this, however, captures the full error of the labor theory of value, since you might (if you really really wanted to) try to describe all these management activities as some kind of "labor." The real problem is this:

Imagine two identical fields, worked by identical workers, with identical managers, for identical periods of time.

One of them is a field of wheat. The other is a field of poison ivy.

The value of the wheat comes from the fact that people want it, not from the labor that went into producing it.

There are lots of problems with the ethical advocacy of a right to private property, but it's much easier to use a simple presentation of surplus-value - like that contained in Lafargue's essay Simple Socialist Truths - than to delve into philosophy, which is only fun when you're arguing with intelligent people, anyway.

That would be great, if surplus-value were a defensible theory. Since it is not, I guess you'll just have to learn to use something less "easy."

No, we don't. But the problem is that our conclusion depends on our assumption.

If we assume that everyone is an equal party, then we conclude that they would only make a mutually beneficial exchange. Therefore, although we might not have made the same deal, we have to conclude that the deal is fair.

If we assume that the parties are unequal, then we conclude that one of them (the capitalist) is making a profit at the expense of the worker.

Right, but if we can demonstrate that the only reason the capitalist could be making a profit is if the parties are unequal, then the problem is avoided.

No, what I am refuting is the labor theory of value. Value is produced not simply through labor on raw materials, but through the coordinating efforts of the entrepreneur.

If farmers in Kansas have hay that they will sell for $5 a bale, and ranchers in Texas will buy hay for $6 a bale, but neither of them knows how to find the other... then no one gets what they want. One role of the entrepreneur is to connect the dots. If he buys hay at the price the farmers want, and sells it to the ranchers at the price they are willing to pay, both the farmers and the ranchers get what they want... and they are perfectly happy to let the entrepreneur take the $1/bale of profit that results from the transaction. It is his award for solving their economic problem.

"Connecting the dots" is labor. Administration, management, organization, etc., all of that is labor. Lafargue deals with precisely this in Capitalist Property, one reason I have it in my signature. It is labor, but it is labor not necessarily done by the capitalist, and in fact the capitalist's profit is irrelevant to it.

The only viable arguments against an assertion of the exploitative nature of surplus-value are based on the capitalist's nature as a provider of capital, and solely on that nature, because that is what guarantees him a profit - not any extra labor he may put in as an administrator. If I have enough money I can buy a company, but I'm not putting any labor into it; nothing about its operation needs to change at all. I make a profit anyway.

In my experience, non-bourgeois who agree with Locke do so because they misread him. Not only did he think the purpose of the state is the defense of bourgeois property, but as a result he thought it would be contradictory to allow non-landholders to vote. Workers are "in but not of" the social contract.

Yes, he isn't what he's made out to be. A perfect example of the sort of actual basis for what's called "liberal democracy," actually, if they disagree on a few technical points, such as the extent of electoral forms.

None of this, however, captures the full error of the labor theory of value, since you might (if you really really wanted to) try to describe all these management activities as some kind of "labor." The real problem is this:

Imagine two identical fields, worked by identical workers, with identical managers, for identical periods of time.

One of them is a field of wheat. The other is a field of poison ivy.

The value of the wheat comes from the fact that people want it, not from the labor that went into producing it.

Very true. I reject the Labor Theory of Value for precisely this reason. But this particular reason is not relevant to the Theory of Surplus-Value.

That would be great, if surplus-value were a defensible theory. Since it is not, I guess you'll just have to learn to use something less "easy."

It's not conclusive, but no arguments are. It remains a very good one.

Right, but if we can demonstrate that the only reason the capitalist could be making a profit is if the parties are unequal, then the problem is avoided.

Yes, but because value is relative, that is a demonstration we cannot make.

You, like Marx, assume a zero-sum in any exchange. You assume that if one party benefits, the other party must have been exploited.

But when you realize that value is relative, you understand that this need not be the case at all. Indeed, most of the time it is certainly not the case. You usually expect all parties to make a profit.

The capitalist can easiliy make a profit by paying the laborer more than the asking price for his labor, and selling the product at more than the sum of his costs. No exploitation... unless the laborer is in a position such that the "asking price" for his labor is necessarily "anything he can get." But you cannot prove that by looking at the transaction. You have to look outside the transaction at the circumstances of the laborer.

"Connecting the dots" is labor. Administration, management, organization, etc., all of that is labor. Lafargue deals with precisely this in Capitalist Property, one reason I have it in my signature. It is labor, but it is labor not necessarily done by the capitalist, and in fact the capitalist's profit is irrelevant to it.
Fine. So, even if the capitalist does none of this, he still supplies the capital and takes on the risk.

If a capitalist agrees to pay workers $10 to make a product... but it turns out he can only sell it for $8, clearly they were not exploited, right? But if it turns out that the market will give him $15, then you would say they are exploited!!

So the fact of exploitation depends, not on the actions of the capitalist, or the price he pays the laborer... but on what the market decides to do? This is nonsense!! The fact of the matter is that the laborer may prefer to get a guaranteed $10 rather than risk only getting $8. The capitalist prefers to pay $10, betting that the product will sell for $15.

As long as the laborer is happy with the $10 he gets (according to his relative value), he has no right to complain when the capitalist's "bet" pays off.

The only viable arguments against an assertion of the exploitative nature of surplus-value are based on the capitalist's nature as a provider of capital, and solely on that nature, because that is what guarantees him a profit

"Guarantees" him? What a curious assumption.

Yes, he isn't what he's made out to be. A perfect example of the sort of actual basis for what's called "liberal democracy," actually, if they disagree on a few technical points, such as the extent of electoral forms.

That is precisely the mistake in reading Locke. For him, the extent of the electorate is not a "technical form." Rather, allowing the poor and the workers to participate in government is perfectly contrary to the whole point of government, which is to defend the bourgeois from the unpropertied!!

Very true. I reject the Labor Theory of Value for precisely this reason. But this particular reason is not relevant to the Theory of Surplus-Value.

You cannot reject the Labor Theory of Value (which assumes that all value comes from labor) and maintain the surplus-value theory of exploitation... without being very, very inconsistent.

It's not conclusive, but no arguments are. It remains a very good one.

It's not that it is merely inconclusive. It is flat out wrong, and demonstrably so!

You are only discrediting the communist position by maintaining this faith in a doctrine that no academic economist (including the Marxist ones) would dare support. They'd probably revoke his Ph.D.!! (And if they didn't, they should!)