JSDD wrote: ↑Sat, 23. Mar 19, 14:42
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... just watched a video from a economic professor who says otherwise ...
https://www.youtube.com/watch?v=NjwGzYbvyIc
... it doesnt seem that far-fetched if you really start thinking about it. the goverment could (but doesnt have to) mandate it (by law), and trade with other countries (aka globalization) isnt a holly cow: putting tarifs on imports/exports is another tool to regulate trade with the vietnamese/chinese/you-know-who-get-15-cents-an-hour and to prevent unfair wage-competition ...
... an example for what i said was also mentioned in the video:
https://en.wikipedia.org/wiki/Mondragon_Corporation
I watched a bit of that video.
First, pay attention to the opening statements. When Marx was developing his ideas, the world was a much different place. Labor laws consisted of "I say, you do."
Next, on Mondragon, they are free to enter into whatever agreement amongst themselves they wish to freely agree to. They are free to make the choice to pursue a cooperative effort. Isn't that great? Good for them! Spain, which can hardly be called a bastion of liberal democracy and capitalism in the first place, has laws that allow them to do that, but does not compel them to do that.
Noticed something in that lecture - The professor values the LL Labor quotient at 100%... By that, I mean that he forces the assumption that the value of that part of the equation is the sum of the total contribution of LL (Living Labor I think?) and that EL+LL=Product Value.
That is a false equation and doesn't exist in reality, IMO. (I am not an economist nor do I consider myself an expert.)
(Note: See the bolded section bordered by **** if you want the succinct version and don't feel like reading the rest.
The reality here is what we're interested in, right?
So, you take some stuff and add energy to it and you get something. That product is the end result. But, that product does not exist in a vacuum when you want to define it in terms of "value." And, the monetary exchange involved in that product generating a capital return does not have to have much to do with its "value" in terms of labor contributions. These are two
dissimilar things. What is the "value" of One United States Dollar? How many values can you assign to it? How many calories are in it? If burned, what thermal energy would be released? How much liquid can it absorb? These are "values," too and that's where things break down.
French Fries.
Let's say one works for McDonald's. Someone, somewhere, produces some frozen pre-cut french fries and sells them to McDonald's so they can have some energy, in the form of Living Labor, applied to them plus a few other things, like other E.L. tools, that will eventually produce a product.
One of the principles of capitalism is, of course, "profit." But, let's leave that for later. Instead, we add up all the Living Labor plus the additional E.L. items and then we add the costs of Continuing Enterprise to the calculation. Those are expenses in the production process of that product that support the creation of the product, but are not directly related. Let's call those something crazy like the "Cost of Production." "Cost" here is owned by who? Well, it's not the L.L. people, is it? Who's responsible for that unescapable cost? "McDonald's" is, right? They pay the electric bill. They pay a team to clean the McDonald's restaurant so it doesn't catch fire or so the health department doesn't shut them down. They consume other E.L. items like water, electricity, brooms, etc.. A small portion of these things are involved in the production of one fully-cooked french fry.
It is assumed the "value" the professor is talking about that is the end product of "french fry" is fully contained. There is no other value associated with it. Further, the Living Labor value is demonstrated, simply, to be 100% of the cost of production. And, what is that "value" exactly?
It's implied that, at least as far as I got in the video, the value is what is exchanged for that product. But... where is that calculation? And, where are all the variables that determine the value of the item (money) exchanged?
Where is the common denominator in the professor's equation? We have to have one for it to make sense, right? I don't mean to "validate" its "truth." I mean we need one to even comprehend what the equation is saying.
If the common denominator is "money" then it's obviously false. We can solve for E.L. by costs in terms of money. Let's say that we ignore the "+" sign as an indicator of the point at which production begins and lump all the other E.L. costs on the left of that. Now, lump all the other "Cost of Production" costs that have to be paid, too. That includes paying people who add their labor indirectly, like Marketing people and the like. Let's also include the other necessities, too, like Managers who are necessary because someone has to sit in an office somewhere and do paperwork. There are some other associated coasts, too, to keep the doors open, like settling lawsuits from people who didn't know coffee was hot, Slip&Fall injuries, etc...
And, what happens with the extended calculation with all the other forms of what goes into E.L.?
(E.L.1+E.L.2+E.L.3+E.L.4+...) + L.L. = Product
Oops... I forgot to call the sum "Value!"
No I didn't.
This is an equation balanced on "costs" of production of a product, not one valued on the value of labor, which has little to do with the value of what is being produced. Why? Because what is gained here is not someone handing over a piece of "Value" to obtain the "Value" produced from the efforts of L.L., but "money" that is paying a "price" that is determined by.... the Market.
The return here is what the professor is focused on, right? Who gets that medium of exchange and what do they do with it? But, he doesn't mention what that medium of exchange actually is and... why is that?
***
The reason he doesn't bring the concept of "money" being "exchanged" for "labor" based upon how "valued" that labor is in a common "market" relative to the production of the "valued product" is because a purely socialistic view of the means and methods of production can not survive in an environment with a medium of exchange based upon "money."
***
If you want his equation to balance out properly, you can't have money in it... The value must be a shared quality of all variables, right? Either that or they must be be rebalanced to have shared values, right? Otherwise, you can't balance the equation sensibly. As it stands, the only way you can balance it is to assume that all variables are, and will only ever be, "labor." Go ahead, try to introduce some other sensible constraints in there to balance everything out. What about "calories" for "French Fries?" Surely you should be able to value everything in that equation based solely upon its caloric content, right? Works just fine up until you try to do what? Go ahead, try it. As soon as "money" crops up, then what? How many calories are in one single dollar bill? And, is that a meaningful variable associated with a dollar bill?
But, I really LIKE french fries and I place a high value on GOOD french fries! Oh, wait, the calculation does not contain an indication of how the consumer values the "Value Produced" does it? It also doesn't care the value that the "Market" places on it, does it? It doesn't take into account "money" and its changing value, does it? Does it say somewhere that money is worth less at some times than others and that this equation adjusts for that? Nope. In fact, the only way it makes any sense is if everything is solely based on Labor, no real discernible individual "value" is placed upon that labor and that the final product is only valued by someone, most likely the person who wrote the equation, in terms of... labor. Well, we'll just accept all that and ignore everything else.
And, that is what Marx and, honestly, the industrial conditions of his day dictated that he do. The downtrodden masses existed. Nobody care about them. Their labor was certainly exploited by the Industrial Barons of the day. The workers in the fields got little and had to like it, else they'd just starve... which many did anyway, even though they were producing "food." So, yeah, we can see how someone was eager to pursue something that could, overnight, "make all that bad stuff go away."
Except, for it to work, for the equation itself to balance out so that it is a valid equation, it requires that money not exist and markets don't exist and every product is the same and there is no choice among consumers, and all labor, no matter the skill, is equally valuable to the production of a "Valued Thing" of indiscriminate "worth", etc, etc, etc..
Yeah, it's a huge TLDR Post. But, darnit, it's not as easy to describe as writing "E.L+L.L.=Eureka!"
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