But before we leave Marxism, I want to say a couple of additional things about the micro theory, and this is the, the analytics and the lying the macro story that we began with. And this is really an invitation to spend a few minutes rethinking, the labor theory of value and its implications. But the labor-theory of value at the time that Marx was writing, was widely accepted by all political economists as the only game in town. It was thought, obviously, to be correct. Why it's obviously thought not to be correct today and we get, we need to pay a little bit of attention why? And we're going to focus our discussion under three headings. First is assumption that living human labor power is the only source of surplus value. Second, his moral argument, which you have to dig a little bit to find. And finally, think about alternative formulations that might capture what he wanted to do with the labor theory of value that we can use while, once we leave the labor theory value on the, on the cutting room floor. But lets start with this idea that living human labor-power is the source of surplus value. One thing it's, especially when you start to bring machinery, it's very unclear how you would actually compute. The living human labor-power because what about the contribution of the dead workers? The workers that built the spinning jenny. Are they being exploited when the cotton is being made with the spinning jenny? And if so, how would you measure that? Big problem for Marx, right? Secondly, as many people point out, Marx completely discounts the contributions of capitalists, right? Do you think capitalists contribute something to the value of what gets produced? >> I think, fundamentally, they make it all happen. Okay. >> Sure. Sure. >> But Marx wanted to say they're just taking advantage of the fact they have capital. They, they're exploiting the worker. They're consuming the worker's living human labor power in order to get something of value. Question is is the capitalist contributing anything? >> I think so. I think he's contributed, is it weird to say that by exploiting someone you're contributing? I don't know. They're making, making. >> What are the capitalists bringing to the table? >> Jobs. >> Yeah. >> The jobs, yeah. Marx would agree with that. But what might he be bringing to the table that Marx wouldn't agree with? >> Expertise, leadership, vision, finance. >> Exactly, the ideas. Right? So Marx has this very kind of blue collar notion of work that is, again, understandable for somebody in the middle of the 19th century. But, you know, having the idea to build a, a desktop computer in the back of your garage. You know that, the idea itself contributes a lot to the value. And so modern economist don't try and reduce everything to one metric of value. They see the many inputs into the productive process, and each one has a return on it. And then there's the, there, there's a feminist critique of the labor theory of value which I can illustrate with a court case 1986 court case in New York was a divorce case. And what had happened was a guy had gone to medical school, and had a stay at home wife who washed his socks and made his sandwiches while he went to medical school. And he then built up a medical practice successful medical practice for 14 years. And then he got divorced. And it, it's an interesting case, because the court said well when she was washing the socks and making his sandwiches while he was going to medical school. She was actually contributing to the value of his medical degree and she therefore had an ownership interest in his medical practice, because she had helped make that practice. She had, she had actually contributed some of the work when she was washing those socks or making those sandwiches. That work is embedded in that medical practice. And so the divorce settlement said, she got a 40% interest in the medical practice. And he was required to keep life insurance to be able to pay her out if something happened to him. So that she wouldn't lose so, so you can see where this is going. This idea that that just the worker who contributes starts to look problematic. You look troubled by that though, is it? Do you find that troubling? >> No, I, I agree. >> Okay. >> Yeah. >> I disagree with the concept. You disagree? >> I mean I agree theoretically, but I have a problem with because- >> You don't think the wife had any ownership interest in the medical practice? >> I think this is a very slick, like a slippery slope and it leaves lots of room for, for women not to do anything and just like live off someone. And I have a problem with that. >> So you, you're dead right that it's a slippery slope, you know, and as others have pointed out once you say that why can't you say well what about the Sunday school teacher who drummed the work ethic into the, the guy when he was a kid? And didn't the Sunday School teacher contribute something to the value of the medical practice? Maybe the Sunday School teacher should get something. And so that's right. It, and it, it is the case that once you start to recognize that there are all of these other inputs, and that it's sort of arbitrary to just zero in on the act of, you know? Passing the medical bar as the, the critical moment. It's potentially all over the place, and you get this kind of web of over determined entitlements, and you wouldn't know where to start to figure out, and, let alone measure who contributed what. So I think that most people would say you're both right. You're right to say, yeah, the wife surely has a claim, and you're right to say, but this is a slippery slope once you start it's very difficult to see where it ends, okay? And I think that, that, that points to the next issue I want to take up, which is that. There's actually a hidden moral argument that Marx never acknowledges but it's doing the heavy lifting in his argument. And he didn't want to acknowledge it, because he said, morality is bourgeois claptrap and we're doing a scientific technical analysis of capitalism, right? Remember, this is science. So we're not doing moral philosophy or moral arguments. But actually there is a moral argument. And so one way to explain what's at stake here is to reference a 20th century Cambridge economist by the name of Piero Sraffa. And Piero Sraffa, who wrote a book called The Production of Commodities by Means of Commodities, gave a very interesting example. And it undermines Marx's idea that only living human labor power creates fresh value. Remember when we, we talked about this last time, I said, well if, if I take some money, and I spend it hiring you to paint my house, I have a more valuable house. Whereas, if I spend that money a meal, the meal's gone. The, the value is gone, right? And, and so this was his idea that the consumption of labor power is different. That's actually a bad argument. What's bad about it? >> Lots of things. First how you make a comparison of value. Like, what makes something really valuable? For instance you can have a meal, and have friends sharing that meal and then you. Have the experience, like a valuable conversation that you can, like, learn something, from you can maybe meet someone, and focus on, you can derive all sorts of value. >> Okay, so that's at least partly right. What were you going to say? >> I think there's a stark difference between value on a house and the value of keeping yourself alive. I think it's, I think the best kinds of investments are the ones directed at maintaining your health. >> Okay. I don't, I don't, I don't think Sraffa would of disagreed with that point. But so the point is rather what, what, what made the argument a bad argument is, is close to what you said. It's this, that if I, I, I, know I used the example of a fancy meal, but if I just eat a regular meal that produces cal, you know, eat calories. That produces energy and I could use that energy to paint the house myself, at least in principle. Okay. So what Sraffa did is, he said it's just not obviously true, that living human labor power is the only source of fresh value. And what he, what he said was the following. He said imagine an economy with just three commodities labor, corn and books. Okay. It takes labor to produce corn and it takes labor to produce books. It takes books, it does not require any books to produce labor or corn, right? But it takes corn to produce labor and corn to produce books. And so, corn in his theory is no different than labor. Because if you don't eat, as you indicated, you'll die. Right? And so, what his point was, was that if you have a labor theory of value, you can compute the exploitation of labor to produce corn in books. You can't have a book theory of value because it, we don't need books to produce labor or corn. But you could have a corn theory of value, which would allow you to compute the exportation of corn necessary to produce labor and books. And it would have identical mathematical properties to the labor theory of value, and therefore, it follows, there's not anything unique about living human labor [INAUDIBLE], okay? We could have a just a, a exactly analogis corn theory of value that would, would have no different properties. Than the labor theory of value. >> I have one question. You mentioned books right. >> Mm-hm. >> So but, all the knowledge is in books so wouldn't be then more valuable just to focus on books and then like get the knowledge. This is like also the theory of education. So maybe you should invest- >> Well, it, it's- >> Only all your value like in educating yourself, and then this is how then you produce later. >> It's possible that you could do that, but, but Sraffa's point was simply that you, it, books might be, you know, you could imagine economies where books were being imported, but his main point was to show that. That you could substitute labor for corn, and still have a theory of, of exploitation and a theory of value, and it would be for all practical purposes identical. And so the, the real, the real moral of the story is that the labor theory of value is not just the technical theory, it's a moral theory. It's that we don't worry about the exploitation of corn by capital, but we do worry about the exploitation of labor by capital and that tells you we assume something, at, that people are entitled to the product of their work. We don't think the corn is the product, entitled to the product of it's growth. Right? And so that is really a moral argument. When we back to the old idea of workmanship. Right? That it's, it's because we think of people are entitled. So, so consider the example in, in. In very primitive systems of mining. They used to have horses at the bottom of mine shafts dragging containers of coal from the face to the bottom of the shaft, and then to be taken up. So, surely you could say that the horse was producing the cost of it's feed maybe in the first half an hour of the day, and then was working 12 hours a day producing surplus. Would we say that the horse is exploited? >> Yes. But I'm not going to pay the horse. >> You're not going to pay the horse? >> No. >> Okay. So would you say the horse is exploited? >> Yes because he, he mentions very important thing about monetary value of your work, but maybe also the employer the one who is exploiting let's say the horse maybe he has been the cost for this horse, so maybe there is just like some in there. >> So the horse isn't like the corn, but it's also not quite like the human. >> Mm-hm. >> Right, and, and I think people's intuitions differ depending on their conceptions of animals rights. Okay, which is only, again, to underscore that this is really an argument despite Marx's reluctance to admit it, about what people are entitled to. Couple years ago some people tried to sue Sea World. Saying that they would, turning the, the performing Dolphins into slaves. You think that would, they were being exploited. The performing Dolphins, people pay money to go see them perform. >> Definitely being exploited, but it's not an uncommon form of exploitation. It's totally accepted. >> It's, it's, okay, is it different than the exploitation of humans in a factory? >> It depends on the condition. >> Yeah. >> What are the working conditions, right? >> Yap. So you know, it's messy, right? It's not obvious. And the reason it's messy and unobvious is that, different people have, as I said, very different issue and, very different intuitions about animal rights. okay. So just again, a couple of external perspectives on this. The extent to which the labor theory of value is a humancentric view in this idea that were are the center of the universe, and we own what we make. We had locks miniature Gods. Consider Chief Seattle here, he says, this we know the Earth does not belong to man, man belongs to the Earth. All things are connected like the blood that unites us all. Man did not weave the web of life, he's mearly a strand of it. Whatever he does to the web, he does to himself, right. So, this is just, again, to underscore the, the labor theory of value really encapsulates this notion that. We are Lark's miniature gods. We own everything. Human beings are the center of the creative process. And it's an assumption. Right? The, the Native Americans have a very different assumption about our relationship with our environments. Or consider Robert Nozick who we'll hear more about in this course. When he's making fun of the labor theory of value, he says, why does mixing one's labor with something, make one the owner of it? Perhaps because one owns one's labor, and so one comes to own a previously unowned thing, that becomes permeated with what he owns. Ownership seeps over into the rest. But why isn't mixing what I own with what I don't own, a way of losing what I own rather than gaining what I don't? If I own a can of tomato juice and I spill it into the sea so that its molecules mingle evenly throughout the sea. Do I thereby come to own the sea, or have I foolishly dissipated my tomato juice, right? [LAUGH] Why think labor is so special, right? That's Nozick's point. And so as the Nozick example, and the Chief Seattle example, and the Piero Sraffa examples all show. Marx's decision to say that we're exp, that human beings are exploited when they don't get the full value of what they produce is surely a moral embrace of the workmanship model, right? And there's no escaping that. So, is there some way of re-formulating what Marx wanted to say that doesn't involve embracing this defunct theory that which in the 21st century really nobody takes seriously anymore. So one, one negative point you can make is well, maybe the sort of exploitometer, this index of exploitation that I put up on that chart is way too simplistic and we could never do the math to figure out how people should be rewarded. On the basis of their contributions. But, let's not overstate what's being shown here. That doesn't mean that markets necessarily reward people fairly either. So just leaving it all to the market, as, as the Pareto system would do, isn't, isn't necessarily the alternative. Right? Secondly I think that the, the people who want to rescue Marx's insight say that the, the important insight is that it's really an argument about freedom. It's not an argument about value at all, and this is where we're coming back to our notion of the freedom of the individual. The, the, the point is, goes back to Marx's original idea that some people have to work for other people in order to live and some people don't. The ones who don't have a kind of class monopoly in the means of production, you know. You, you could walk away from working for me, but you have to go work for somebody else. So there really are two classes of people in society and the people who have to work for others in order to survive are in some basic sense unfree whereas the people who don't have to work for others are not unfree in that way. And this is a famous line of Joan Robinson, a 19th 20th century Cambridge economist. She said in a lecture one day what's the one thing that's worse than being exploited by capitalism >> Oh ,yeah. [LAUGH]. >> What's the one thing worse than being exploited by capitalism >> Being unemployed. >> Not being exploited by capitalism exactly, so that was her, her sort of ironic take. On if you're stuck in a capitalist economy you want to be exploited but therefore your freedom is compromised and Locke expresses that thought in a similar way when he says a Man can no more justly make use of another's necessity, to force him to become his Vassal. By withholding that relief, God requires him to afford to the wants of his brother, than that he has more, than he that has more strength can seize upon a weaker, master him to his obedience, and with a dagger at his throat offer him death or slavery. That's a very dramatic way of saying work for me or you're going to die. But I think that is the enduring point in Marx's, the enduring point in Marx's intuition. That putting people in this position of being in the power of others is the core of what he objects to. And the. Really, the labor theory of value is dispensable. So the take aways. First of all, on science. As with utilitarianism, we can't wring the politics out of politics. Those distributive choices, whether it's between artificial hearts and dialysis machines or something else, are never going to go away. We're never going to get to the point where the government of persons is replaced by the administration of things. That was the way Engle spun it in Anti-Dühring and Lenin quoted him actually. It all goes back to Saint-Simon that phrase, but it's a sort of stock phrase of Marxism, we're just never going to get there. Can't ring the politics out of politics, right? Some rights regime is inescapable. It follows but we have to think about it with in the context of scarcity, and there's no natural baseline. There's no three school years in ten. There's no basic needs that are going to make that go away. And finally power might be more useful than thinking about workmanship or contributions to value or anything else we've discussed so far as a basis for thinking about rights. But next we going to turn the page and look at the social contract.
