Does economics have its equivalent? Is there a basic “quantum of value” underpinning exchange? The classical economists thought so. They argued that labour was that quantum: the necessary element embedded in every good and service, the one input without which nothing else had value.
Modern economics abandoned this idea, preferring the subjectivity of marginal utility. Value, it claimed, lies in the eye of the beholder, not in the sweat of the worker. Prices, not labour, became the measure.
But in losing the quantum, economics lost its anchor. Without a photon of value, the system floats on abstractions, vulnerable to bubbles, manipulation, and delusion. To rebuild economics, we need to ask again: is labour the indivisible unit of value?
Nope.
The valuing of stuff is done by human beings. Who do not value stuff at the labour that went into its creation. Therefore labour is not the unit, source nor measure of value. Simply because the people doing the valuing – peeps – do not use labour as their unit, source or measure of value.
Tim’s reply is undeniably, empirically true.
In 2010 during that year’s Copyright Wars I had a good deal of interaction with the “heritage sector”. It became glaringly apparent that these people were only interested in artefacts: despite their pieties they didn’t give a toss about the people who made them. It occurred to me then that “everyone wants the Vuitton bag; no-one is interested in the person who made it.”
You buy a nice new iMac for your YouTube productions. Are you interested in the chinks or pajeets who made it, their working conditions, or what they were paid? Of course not. You assess and buy the object itself.
All natural resources are free because they’re just there. They only acquire value when someone decides to hunt, gather or mine them. Those blackberries are worth jack shit until I decide to pick them, and then perhaps process them into blackberry jam. Some people like that jam and may buy a jar from me at a car boot sale. Others don’t; to them the jam is worthless at any price, including free. The “value” of my labour doesn’t enter into it. Only provenance does.
Exactly.
Even more, the thing in nature isn’t a resource until someone comes up with a use for it.
Arabia had certain areas where some black smelly stuff came up out of the ground. This was known back in Roman times or earlier. I think some medical types may have suggested it was good for some skin conditions, but it wasn’t useful for much.
Fast forward to the early twentieth century. Hey, we can boil this stuff and pave roads with it! And it’s a better fuel for engines than coal!
You’re interested in the people who made a thing in the sense that you want that thing to work. How interested depends on what you gave up to buy that thing.
iMacs are famously expensive, so most don’t buy cheap knockoffs. For watches, not so much now that they’re mostly cheap ornaments rather than expensive timekeeping instruments.
Surely Spud proves himself incorrect!
He likely spends hours on his economic “theory”, even if it has the appearance of 30 seconds work by a monkey, however most people value it at zero (well, less than zero because he’s a danger to society).
Um. Today is Saturday. I thought Quantum Economics was last Thursday? Perhaps the Ritalin is too effective?
The Tulip silliness happened in the 1630s; how modern is this modern economics he (or his demented large language model) dribbles about?
“Without a photon of value”
If anybody knows a rampaging mob of respectable physicists please let them know there’s a job for them in Ely.
So he’s a Marxist now? The labour theory value was bollocks then, it’s bollocks now. No wonder he likes it.
Das Kapital has all the economics theory the commie dick needs.
His trotting out LTV seems quite anachronistic. Fighting last centuries debate. Picking the losing side. He’s so sentimental.
Capital, Book I, Chapter I, is a puzzle. Marx starts out by showing that value comes not from labor, and a few paragraphs later he asserts that it does.
The LTV as you abbreviate it is a hundred per cent right from the point of view of the producer, who will not (rationally anyway) sell a good for less than the value of the inputs, labor cost being one. The intersection of the LTV and the market value is what is called a price signal (Tattie are you reading this) telling the producer to go gangbusters, or to stop producing. Kodak and Underwood learned this the hard way.
Except the producer’s cost comes from way more than just labor.
50 years ago when I was a supervisor in a union shop, workers would say to me, “You can’t make anything without us.” I’d reply, “We can’t make anything without electricity, either.” I’d rattle off a list of all sorts of other things needed. LTV is rooted in labor’s belief in their primacy. I’d show them there are many other things just as important. Labor is critical, but they have no primacy.
“You can’t make anything without us.”
Swatches? I presume there are engineers that maintain and repair the machines that produce the watches but the process itself is completely automated. As long ago as the 1980s I remember visiting a factory that made flat pack furniture that had no staff at all in the main production area.
After reviewing project proposals, I would file rejected ones that were close to being worthwhile. Whenever the wage roll got a raise, I’d pull the folder out.
The more they were paid, the more worthwhile it was to get rid of them.
Hold on, maybe he’s on to something important here. So, we have the Red & Blue teams (can’t go with A & B, that’d reek of preference). Red plows a ditch from Mo-Th, Blue fills it in on Tu-Fr. We pay them all extremely well, and under the labor value theory, we’re creating gobs of wealth. Pretty soon everyone in our society will be working for the teams. And it would solve income inequality too.
This is very, very doable, and if it works think of how wonderful life will be. How can anyone hesitate to try this given the incredible potential upside?
You have just described the council roads department exactly.
Hmm, the filling in of holes seems to bear little relation to the current activities of council road departments.
I thought the problem with councils is that they didn’t do the ‘filling holes’ part;)
And this basically is why Marxist economics is wrong. I used to bury my head’s in my hands as a student as my lecturers droaned on about the Theory of Surplus Value. This was in the 1980s. Ricardo and the lads like Senior and Mill recognised this fact before Marx came about. Eugen Boehm Von Bawerg is good on this too.
Labour is just a cost of production, it has no actual bearing upon the value of an object beyond the need to break even. It is only a factor if the person making the commodity is also the one selling it.
Using the quantum stuff is so obviously woo i’m tempted to attribute some diabolical cunningness to it. It’s like a laughably badly worded scam email. Its not composed so as to convince everyone its purpose to filter peeps out leaving only the very easily convinced.
Quantum weirdness encompasses the aspects of quantum mechanics that challenge and defy human physical intuition. Quantum economics encompasses the aspects of economics that challenge and defy human mental intelligence. (ack Wikipedia)
Quantum justice will be along soon.
And quantum equality.
The commies have decided that ‘quantum’ is good, or, better, it confuses people, so they use it more for everything.
Labour value seems embedded in human expectations. When I published my first work (a historical map), the people I was marketing it and publicising it to seemed more interested in *how* *long* it had taken for me to do it rather than the fact I’d done it at all. As though if I’d spent 15 years to complete it then it would have more worth that the one week of walking around manually surveying the ground, I don’t know how long in the library checking written sources, and one week of two hours per day at the drafting table. My opinion was that if it had taken me months and months drawing it, surely that would demonstrate how inutterably incompentant I was, not some sort of virtue. They wanted to promote “taken *three* *years* to do!!!!” instead of the reality of “did the survey in one week in 1986, got the opportunity to print it in one week in 1989”.
Even a couple of decades later when I revised and redrafted it, my then-wife insisted I should be charging more for it, “because I’d spent ten years doing it”. If I charged more, nobody would buy it. The value is the artifact, not the years of occassional hours now and then of work put into it.
I did some labour this morning. I climbed the stairs, took down my trousers, sat on the bog and after some effort delivered a turd.
I’m going to post it to Ely with an invoice attached.
I think Bob Heinlein destroyed the labour theory of value by pointing out: When I cook an omelette, it takes me half an hour and the result is often inedible. When a professional chef cooks one, it takes five minutes and the result is delicious. But labour theory tells me my omelette is worth more.
Wonderful
Work sixteen hours and what do you get?
Chris, the more advanced labour theory of value says that the time of trained experts is more valuable by the amount of time (their own and their trainers’) it took to train them.
So everyone’s hourly value is still ultimately the same, but everyone’s current hourly value includes some element of embedded training time, which is different for everyone.
It’s still bollocks, because its fundamental concept of value is wrong, but like all socialist bollocks they add more and more complexity onto it to try to deal with the obvious departures from reality rather than accept that the concept is wrong.
“The more advanced labour theory of value says that the time of trained experts is more valuable by the amount of time it took to train them.”
This applies to musicians in spades. I only realised when I started learning piano that it takes hours and hours of patient practice just to get as far as not being utterly shit, let alone getting to the level where people will pay to hear you play. Of course, in the end your concert tickets are still only worth what people will be prepared to pay for them.
Sounds like epicycles, and put in for much the same reason.
He, literally, does not know what ‘quantum’ means.
You can have a quantum of labor – possibly – labor can not be a quantum.
Like this – there is a quantum of time. All time is grouped in whole number units of this. But time is not *a* quantum. The quantum is just the smallest physical unit of time that can exist.
True, but he doesn’t know what “economics” means either. Or “value”.
Even if they did – the value of labor would *still be subjective*. You can’t look at any particular bit of labor and go ‘it inherently worth x Dollars’.
In the case of Birmingham dinner ladies, apparently you can. And bankrupt the council.