Studies in Mutualist Political Economy Part I: Labor Theories of Value

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Jason Kuznicki

Jason Kuznicki is a research fellow at the Cato Institute and contributor of Cato Unbound. He's on twitter as JasonKuznicki. His interests include political theory and history.

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9 Responses

  1. Avatar Emile
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    says:

    Very interesting; makes me want to read the book!

    Isn’t the desire to denominate value in labor primarily be an attempt to argue that “toil and trouble” is the moral grounding of our understanding of property rights? That someone who (like the shirtmaker) invests a week in creating something which other people want has a greater claim on the value of those goods than someone who (like the oasis proprietor) accidentally comes into control of something?Report

  2. Avatar Mark Thompson
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    says:

    Nothing to add right now, but just wanted to reiterate that I enjoyed this and look forward to part 2. Hopefully, Kevin himself will see this and have time to offer up a response.Report

  3. Avatar Simon K
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    says:

    Very interesting Jason. I was thinking of reading Carson’s book in the hopes that he would present a better patch to the labor theory of value, but it seems not. Perhaps your next article will give me a better reason to read it.

    A few random points:

    1. Political economy used to be obsessed with the search for some kind of objective theory of value in order to work out what prices should be without reference to the market, in order to override the market when it was “wrong” ie. price gouging, speculating, dumping, etc. You still see a good deal of this in politics, but no-one is looking for an objective foundation for it any more. That’s largely thanks to the Marginal Revolution, where they in effect gave up on the idea of theory of value and presented a theory of prices instead.

    2. There’s some residue of this in lefty discussions of the labor theory of value. Amongst those who distrust markets, they need an objective standard of value in order to know how to distribute goods. Kevin doesn’t distrust markets – just capitalism – so I’m not really sure why he needs the labor theory at all. Is he trying to make the normative point that since all value comes from labor, its the laborer who should control what happens to that value? That idea also crops up, but its rarely made explicitly. Its compatible with some kind of libertarianism, though, so maybe that’s were Kevin is going.

    3. That “socially necessary” business was always the gaping whole in Marx’s version of the labor theory of value. Its just weasel-words for “actually demanded” and once you accept that its the amount of labor thats actually demanded at a given price that matters, you’re don’t have a theory of value any more.Report

  4. Avatar Miko
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    says:

    And indeed, we often find marketable goods that haven’t had much or even any labor done to them, despite clearly being of great value

    Saying that such goods “clearly” have value is begging the question. Clearly they have utility, but saying that they have value needs an argument. Let’s look at the oasis example (although the same logic will work for all of them except the violinist, which isn’t a compelling example to me anyway):

    You say that you own the oasis and that you will charge me for use of it based on your estimation of the utility of the water to me. I claim that land cannot be owned and proceed to drink anyway. Unless you use force to stop me, the transaction is over and we conclude that the water in fact had no value (despite having high utility to me). If you use threaten to use force, I will ignore you unless I think that you would be successful in stopping me. For example, showing me your five armed men that have been training daily would probably convince me to pay you for (ostensibly) the water. However, in this case it’s clear that I’m really paying to prevent violence against me and that the quantity of violence I expect to avoid is proportional to the amount of labor that your armed men have spent in training. So, once again the water itself has utility but no value, as I’m really paying only for the labor of the thugs. (And, of course, such value to you would be reduced by the labor my own thugs had put into training, so that we’d eventually just get rid of the thugs, absent a government with the ability to fund the training of its thugs through coercive taxation.)Report

    • Avatar Jason Kuznicki in reply to Miko
      Ignored
      says:

      @Miko,

      If I used force to stop you, and yet the good had no value, you’d just walk away.

      The sheer fact that my force causes you some amount of discomfort indicates that you value the good I’m depriving you of.Report

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