ZeroNowhere
21st August 2010, 10:24
The label 'subjective theory of value' is somewhat strange; it seems to come from the idea that people value things differently, and 'value' is thus subjective, but is then used to describe an economic idea. One could hardly deny that the statement, "The price of wheat is $20," is rather different from, "I like Psychotic Waltz a lot more than Dream Theater." One could not buy an iPod for $3 just because you see it as being worth that; rather, it has a definite price, which is as such objective.
Anyhow, let us assume that supply and demand are equal. In that case, we have various commodities at different prices. However, with a certain amount of money, one may get a different amount of commodities. So, for example, with $5, one may buy two iPods, twenty cars and three cigars. In that case, we have:
2 iPods = 20 cars = 3 cigars. This could alternately be rendered: 2i = 20c = 3n ('n' for nicotine).
This is because, through the medium of money, all of these commodities are interchangeable at a certain amount. So it doesn't really matter what commodity it is, but merely that it is worth a certain amount; if a company produces two iPods, and sells them off, they can then buy 3 cigars with the money.
Now, let us alternately render the equation as such:
2i = 20c = 3n = x.
We shall call this x 'value'. Now, one may not deny its existence, for, after all, it only expresses the fact that these commodities are all worth the same amount. This x exists because of the function of money (as we do not have barter) as a universal equivalent commodity, one which can essentially exchange with any other commodity. Thus, x = $5. Therefore, this x is expressed in money. One can see this, for example, by the fact that, if one were to take the equation:
x = 20c.
And express x as $5, one could get the price of a single car simply by dividing $5 by 20. However, is 'x' simply reducible to price? No, rather price is an expression of it, and how it is actually expressed in the economy, due to money's function as universal equivalent. That is, as, rather than direct barter, commodities are exchanged through the indirect method of money (you sell something, get money, and then use this to buy something), x is expressed in money. On the other hand, money is still a commodity, and thus one could write x = 20c, or x = 3n, as much as x = $5. Thus, despite x being expressed in money, it is not equivalent to it, so to speak, but rather $5 is only a form of expression of the quantity 'x'.
If this is beginning to sound overly mystical, let us recap: 20 cars = 3 cigars = 2 iPods, and as such one may call the quantity represented by 20 cars, 3 cigars and 2 iPods 'x', their 'value'. All it means to say that money is only a form of expression of it is that now we have: 20 cars = 3 cigars = 2 iPods = $5 = x, and all of the of the others, including money, are commodities. It is thus perfectly reasonable to insert 'x' here, and simply means that all of these commodities are worth the same, and may be exchanged.
Now that that is established, let us look at capitalist production. It goes something like this:
M - C - M'
That is, a capitalist invests money in wages and means of production (the capacity to labour and the means of production are both commodities, so 'C'). However, they then get back more money by selling the stuff which they produce. It is well known that profits are the purpose of capitalist production, as simply investing some money so as to receive the exact same amount back would not really be of much benefit, and one would also not be able to expand production, etc; you may even need to decrease it, as the amount you need for commodities for yourself must now be taken out of the original amount, rather than coming from profits.
Let us put that back in terms of value. So let's say that a capitalist invests $5 in means of production and wages. $5 = 2 iPods = 20 cars = 3 cigars = x. They then have 4 iPods produced, and sell them off for $10. $10 = 4 iPods = 40 cars = 6 cigars = 2x. In that case, the value, 'x', has doubled. This simply means that, with twice the amount of the money commodity, one can buy twice the amount of commodities; alternatively, with twice the amount of cigars, one can exchange this for an amount of money which will allow you to buy twice the amount of iPods. In that case, value increases after the labour process; one could say, the labour process produces value. This is quite incontrovertible.
In that case, the question is why it increases. A 'subjective theory of value' advocate may say that it is because people are willing to pay more for objects that have gone through the labour process than those which have not. This is, however, simply a tautology; if they were unwilling, then the commodities could not be sold at a profit. What is being missed here is that, if this 'subjective' idea is the case, then value does increase as a result of the production process.
Now, let us look at the productive process. Let us say that the $10 which the capitalist has received was produced in 1 hour of labour-time. Now, how would one double this quantity? Simple; employ two hours of labour. How else would you do it? Remember, supply and demand are equal. We shall assume average productivity, rather than treating a company with higher or lower than average productivity; this would tend to equal out, as other companies would be forced to catch up in order to avoid underselling.
We shall here treat the product of labour as 'total price' (ie. the prices of all products produced added together), as evidently what matters ultimately to the capitalist is that his total income exceeds his expenditure, and his total income derives from his total price, rather than the price of a single commodity. In that case, on the one hand he produces a total price of $20, and on the other a total price of $10. In the one case, he produces $10 = 4 cigars = 6 cigars = 40 cars = 2x, on the other $20 = 8 iPods = 12 cigars = 80 cars = 4x. The value produced has, again, doubled.
Now, one may say, this simply expresses the fact that twice the amount of commodities have been produced. This is true, in a sense, yet it misses the fact that commodities require a certain amount of labour-time produced; twice the commodities generally implies twice the labour-time. Of course, one may find a fresh iPod somehow fallen from the heavens, but we are here dealing with capitalism, generalized commodity production; Apple cannot rely on iPods suddenly materializing in customers' hands as soon as they pay.
In that case, then, two hours’ labour produces twice as much value as one hour. We have only seen this for a single commodity, however. Nonetheless, all commodities are interchangeable qua commodities, and may all be expressed in money. In that case, 1 hour’s worth of a single commodity would exchange with 1 hour’s worth of another, as each would be worth the same amount of money. If 12 doors = $6 = 1 hour’s labour, while 6 widgets = $12 = 1 hour’s labour, then it is the same as if one commodity producer were to produce, given equal productivity, 6 widgets in two hours, and another 3 widgets in 1 hour, and both were to sell for the same total price. That is, it would be quite strange.
The thing about commodity production is that all commodities are reducible to a certain monetary value, and otherwise interchangeable with other commodities in terms of value. Thus, the labour-time which goes into them is not concrete, but abstract, and labour counts simply as labour in general, rather than a specific kind of labour producing a specific kind of thing (capitalist production is simply value production, the use-values do not matter). Therefore, the same applies to widgets produced over one hour and widgets produced over two hours as to widgets produced over one hour and doors produced over two. One could obliterate any mention to the specific commodities, and say:
1. Spend $2.
2. Production.
3. Get back $4.
4. Win.
That is the whole point (if one only produced enough commodities to get back $2, time would have been wasted. If less, you’ve made a loss; that was silly of you.) We have already seen that the increment in value comes from the labour process. In that case, if the increment is doubled over two hours’ labour with one commodity, we get.
1. Spend $2 (assuming no increase in mop or lp).
2. Production for two hours.
3. Get back $8.
4. Buy a yacht.
This is, then, interchangeable between commodities, as it does not matter which commodity we are talking about. $8 could be 8 widgets, but it could also be 10 doors or 40 yards of linen, or any other commodity.
What could add value in the labour process? Could it be the means of production, the machines and the raw and ancillary materials? Well, let us take a closer look at the labour process.
We have earlier seen how two hours of labour-time will produce twice as much total price as another, given average productivity. Now, during these two hours, the means of production are used. However, they are precisely means of production; they are used by labourers in order to produce stuff. However, the two hours are distinguished from the other twenty-four hours of the day in that labour takes place during them; they are distinguished from the one hour of labour in that the labour is longer. So then could one say that the means of production produce value because they are employed in production? Well, let us rather go e-prime here, and say: Workers, people, employ means of production in production. It is this that produces value, the labour time.
The means of production, then, function in the passive voice; they simply absorb labour, so that it may produce value. As it is, profits are the main aim of capitalist production, and given a certain cost-price (expenditure on labour-power and mop), a higher total price means higher profits. Thus, a higher value means more profits. In that case, the purpose of labour-time is to produce value, and the means of production, rather than simply being employed by the labourer to produce stuff, are employed by the capitalist to produce value. Therefore, their purpose in capitalist production is not, as in a simple labour process, to aid in the production of stuff; it is to absorb labour-time from the labour, and thus to extort value. As such, it comes to stand over the labourer, as something which pumps living labour out of him. Yet we must recall that it itself is a product of past, ‘dead’, labour; in this case, then, dead labour feeds on living labour like a vampire.
Now, where does this value go? Well, it is used to hire the workers once more, and to expand production, hire more workers, etc. Thus the product of their labour hires them.
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