Thursday, August 22, 2013

What Use is "Use-value?"

What makes a thing useful?  What makes a human useful?  And then, how do we put a value on that use?

Philosophers and economists have long pondered this enigma of value, and come up with brilliant explanations.  By the end of the 18th century the classical economists had come up with the dual doctrine of use-value and exchange value.  You can see that some things, like food, have value because they are directly useful for maintaining human life.  But other things, like diamonds, have value only because people want them and are willing to pay money for them.

Eventually the marginalist economists decided that the attempt to make an issue between use-value and exchange-value was a chimera.  People establish value when they buy and sell and express their preferences by their actions.  Why a person values a particular item is known only to herself and to God.

But Karl Marx, outraged by the economic turmoil of the 1840s, decided to make a scandal out of the difference between use-value and exchange-value as it applied to labor.  From Wikipedia:
Marx emphasizes that the use-value of a labor-product is practical and objectively determined,[4] i.e. it inheres in the intrinsic characteristics of a product which enable it to satisfy a human need or want. The use-value of a product therefore exists as a material reality vis-a-vis social needs regardless of the individual need of any particular person. The use-value of a commodity is specifically a social use-value, meaning that it has a generally accepted use-value for others in society, and not just for the producer.
It was precisely this idea that the marginal economists exploded: the idea that there was an objective use-value to anything.  Moreover, it denies the fact that every human act is social, or potentially so.

Think of a peasant scrabbling a life on the side of a mountain.  For him, the use value of the corn he grows is expressed in the corn-meal, the tacos he can get out of his harvest.  But suppose our peasant discovers a fertile valley that can produce much more for the same amount of labor.  Now he can feed the corn to domestic animals and eat meat instead of tacos.  Or he can exchange some of the corn with the chap in the next valley for salt, which is not available in his valley.  The use-value of the corn is different than before.  And now some of it is exchanged.

When Marx critiques the system of wage labor, the fact that under industrial capitalism the worker exchanges his labor for wages rather than produce directly for his own needs, he proposes that the worker is thereby "alienated" from the product of his labor, which is now owned by the capitalist.  And this alienation is exploitation.

Marx forgets that the laborer was never merely producing for his own use.  In the hunter-gatherer band the successful hunter had to share his labor product with the rest of the band; he was immediately alienated from the product of his labor.  In pure feudalism the laborer was alienated from his labor in a variety of ways: he might have to labor on the lord's land; he might pay rent; he might be required to fight and die as a soldier in the feudal host.  How alienating is that?

Perhaps the worker was a guild member in a city.  In that case, as a master, he would have to produce exactly according to the rules of the guild at the price established by the guild.  But most workers were not masters.  They were apprentices, indentured laborers working almost for free, or perhaps paying for the privilege of learning their craft.  Or they were journeymen working for a master.  Or they were outside the comfortable world of the guild altogether, trying sell their labor product while dodging the city officers enforcing the guild rules upon outsiders.

When the young Max Weber studied the economy of rural Prussia "east of the Elbe" he found that the peasants much preferred to work as free workers rather than as the underlings of the local Junker, even though they earned less and had less security than the tied laborers.  How do you measure that?

When you read Marxist inspired work, as I am right now in Habermas and the Dialectic of Reason by David Ingram, you find that the Marxist exploitation narrative is taken for granted.  And you find another thing taken for granted: that government action can relieve exploitation.  Once you do that, the only question remaining is what degree or color of force is appropriate in the fight against that exploitation.

The conservative and libertarian critique of the administrative state denies first of all the argument for exploitation.  The market is certainly ruthless, but it is ruthless in that it forces everyone to produce not just for their own needs but for other peoples' needs.  That is what exchange and the division of labor means.  It means that I produce for other people, not just myself.  How social is that?  If it is exploitative to produce for other peoples' needs then I am all for exploitation.

But the conservative and libertarian critique does not stop there.  It argues that the attempt to solve exploitation and inequality by government subsidy and cash handouts and control of market outcomes is counterproductive.  If you subsidize something then you will get wasteful overproduction, as in green energy.  If you distribute cash handouts, as in food stamps and welfare, you motivate people to reduce their labor output.  That's what the Cato Institute found in its recent study of welfare "A Better Deal than Work".  When you load up labor wages with payroll taxes you reduce the demand for labor and you encourage people to start working "off the books."

The truth is that the whole corpus of left-wing thought, from the labor theory of value to the single-payer health system is a gigantic apology for political power.  It simply says "we know best" and we will force you to obey.  It is, you might say, exploitation, "naked, shameless, direct, brutal".

And what is the use-value of that?

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