2019-11-20 - To the series of work, wage profit of arte-tv, discussion paper – 1
Dear Ladies and Gentlemen,
thank you for your versatile series "Work, Wage, Profit".
I see your contributions not only as sources of knowledge, but also as calls for dialogue. In this sense,
the following discussion contribution is intended.
In particular to Dr. med. A. Zhu, Dr. Ing. A. Orain, Lord F. Lordon, Dr. K. Nubukpo and Dr. Ing. I am
referring to Darmangeat (I hope to name your academic title correctly).
The series "Work, Wages, Profit" is opened by Dr. A. Zhu with a Marx quote and asked the question
whether Marxism is still relevant.
In my view, the labor theory of value of Marx in the classical interpretation is flawed and therefore not
up to date. Marx's labor theory of value reflects a simplified view of the economic situation and only
works if an entrepreneur sells all work products with the expected surplus value.
Nor can the classical interpretation of labor theory of value explain values related to arts, ideas,
archaeological finds, etc. In addition, the classical interpretation of labor theory of value captures only
the human labor force as value-forming actors. But value is also contributed by machines and partly
by nature.
I would like to put up for discussion a current interpretation of this theory. With this all value
formations are explained. It also shows that, in addition to human labor, machines and, in part, nature
are used by humans to create value. An updated interpretation of labor theory of value shows that the
market is the place of value creation. Please do not misunderstand this: There is no doubt, that on the
production side of the commodity society the conditions, i.e. the foundations for value relationships
are created, but not values as such.
The value is a social relationship, thus acting between people, specifically between buyer and seller. It
follows that the market for efficient business design must be respected.
The market is neither good nor bad, he does not direct, he does not think. It reflects only situations
and relationships, but it must be controlled by people (they always do, but not necessarily in the
interests of society).
In the socialist countries the market was not sufficiently respected and so this economic system
collapsed.
The labor theory of value according to Marx
After Marx the value is calculated according to the formula W = c + v + s. Marx applies this formula to
the production side of the commodity society and concludes that the value is produced there.
Value will be assigned
But value cannot be produced as a social relationship. Such is formed between people, the value
concretely between buyer and seller. It cannot be built into things or tied to work products through
production. A social relationship will be assigned.
Value - objective share and subjective shares
Such a relationship must have an objective share because it must go beyond the idealistic ideas of an
individual. As a social relationship, however, it also needs subjective shares, because it must remain
linked to the people.
One can only produce reference points, i.e. prerequisites for value relationships.
The production side of the commodity society
Dr. A. Orain shows a sketch on working hours. From my point of view, the so-called "unpaid working
time" is not exactly captured by the classical interpretation of labor theory of value: on the production
side there is no added value according to the formula W = c + v + m. So there is not the so-called
"unpaid working hours" there.
2 – 2019-11-20 - To the series of work, wage profit of arte-tv, discussion paper
The surplus value pays the buyer in the market. Only the paid surplus value results in retrospect in the
so-called "unpaid working hours". If the entrepreneur fails to gain surplus value in the market, then he
does not get so-called "unpaid working time". On the production side, there is only an expected surplus
value and therefore only an expected "unpaid working time".
Since the surplus value is part of the value, there can only be an expected value too. The value formula
must be adapted for the production side of the commodity society: W|expects = c|cost factor;
replacement expected + v|cost factor; replacement expected + s|expected. The entrepreneur links
this expectation value as an offer price with the potential commodity and thus offers the commodity
on the market.
Exploitation?
With the fictitious surplus value on the production side the entrepreneur cannot exploit, because
exploitation does not mean bad pay, but that the labor brings the entrepreneur more than it costs.
Example
In the figure "Value Ratio, Value, References of Value Ratio" (a summarized simplified graph), an
example is shown based on the production of five devices (which in practice can stand for 5,000):
Production of five devices
An entrepreneur let produce 5 devices.
Weighted needs
The process of selling one device is highlighted on the image: A potential buyer discovers the device
and trains a weighted need for it (weighted as he has to buy other things for its livelihood too) - the
blue arrow, starting from the initial potential buyer.
He shows the potential seller buying interest. Usually the values of both sides are different at this point
in relation to the product - in this example the expected value of the entrepreneur for the device is
€220, that of the potential buyer €180. Thus, the entrepreneur trains a weighted need to value
equivalent of the potential buyer - second blue arrow, starting from the entrepreneur.
Forming a value relationship between the potential buyer and potential seller
The weighted needs lead to a value relationship between both potential exchange partners. Such exists
only on the social level - light green area on the picture. The (initially potential) commodity exist in this
case outside the social level.
Shared value size
At the bazaar, a common value between the exchange partners is worked out in the dialogue, in the
department store by a one-sided adaptation of the buyer to the wishes of the seller (but this also
creates a common value, because the potential buyer could also do without the purchase).
In practice, these are often different value sizes for different retail chains.
Agreement on the common value size
The entrepreneur agrees with the potential buyer on a common value. This has a meaning only on the
social level. From there it is assigned to the (still potential) commodity and the (still potential) value
equivalent.
Note: With the value equivalent of money, this becomes clear only in times of crisis.
Exchange
With the exchange (legal time), the real allocation of the common value to commodity and value
equivalent by the exchange partners takes place.
The value formula must be adapted for this process in the marketplace:
W|real = c|replacing + v|replacing + s|real. This makes it clear that the value is first formed on the
market and thereby assigned to the goods and the value equivalent and not previously incorporated
in goods and value equivalent.
In this example, only three of the five work products can be sold. Thus, only to these three work
products are assigned value. With respect to the remaining two products, no value ratios are formed
2019-11-20 - To the series of work, wage profit of arte-tv, discussion paper – 3
and consequently no value is assigned to them - they remain with the expected surplus value, the
expected unpaid working hours and the expected values.
The assignment of the value to a commodity takes place in the same way as the assignment of property
to an object, such as e.g. a house: Even property is a social relationship and acts between the owner
and the entire society, almost always beyond. Property is also not incorporated or inseparably
assigned. The assignment of value and property takes place only on the social level and is not tangible
outside of society.
Only in the market there is real surplus value, because the buyer pays, and only then the real value is
formed.
Nor does the buyer add this surplus value to the cost of production, as Marx's value formula suggests.
The buyer can only pay extra if he previously completely replaces the production costs.
From this follows that the value is not formed from the production costs plus the expected surplus
value, but from the replacement of the production costs plus the real surplus value.
"Unrecognized value"
On the production side, therefore, there can be no "unrecognized" value, because surplus value does
not arise from the addition of a sum of money to the production costs c plus v. Surplus value comes
only when the buyer completely replaces these production costs and pays more. Since the surplus
value is part of the value, there can be no value until it is clear whether surplus value is being paid, and
if so, how much.
On the production side of the commodity society, there are only expected values. These are composed
of the costs of production and the expected surplus values and linked to the potential commodities as
offer prices.
Objective value size and ideal values
In terms of value, the objective is also the common value of the buyer and the seller.
In addition to the ideal components of the value of buyers and sellers, from which the objective value
size was formed, the exchange partners can also have other ideal ideas about the goods in exchange,
but these are not relevant to the value, since they are not part of the value relationship - in the picture
are the remaining wishes of €180 in the buyer and €220 at the seller.
The objective value size exists only on the social level
Only the common value size is an objective value size:
- Only this will be effective on the social level.
- Only in accordance with exactly this value size is the purchasing power in the market objectively
transferred from the buyer to the seller.
- Only this objective value is recognized by the society through the purchase contract and VAT.
- Only the objective value size should be included in the total amount of all values of the society:
The workers are paid for their labor. Wages represent entitlements to percentage shares of all
economically distributable goods.
Note: In the socialist countries, the values were supposedly produced according to the formula
W = c + v + m, and the state banks circulated the money for the "values" produced.
But these value ranges also included the unsaleable work products. Thus, over time, more and more
funds for non-salable, i.e. potential, goods circulated. As prices were kept constant over long periods
of time, there was an ever-widening shortage economy.
Commodities
Commodities cannot be produced as such, only potential goods are produced. The products of labor
become goods on the market only when they become the use value for others through the sale. Only
in cases of sale are the works used for the work products recognized as socially useful and thus as
value-forming, only then the potential goods become real goods.
Only with the real goods and with real values does the entrepreneur (with correspondingly high surplus
value) accept more than he spent on the labor force. For the two remaining products in the example,
4 – 2019-11-20 - To the series of work, wage profit of arte-tv, discussion paper
the entrepreneur incurs only costs, but no values. Only with the real goods can the entrepreneur
exploit.
Market and workers
The fact that the value is assigned to the market implies that it does not matter how the work products
are created, i.e. whether for instance a part is reshaped by a human or a machine. This makes it clear
that the preconditions for value relationships are created not only by humans, but also by machines
and by nature. It also becomes clear that value relationships and thus values related to all kinds of
work products, arts, archaeological finds, ideas etc. can be formed. Costs of the owner (c plus v) and
the surplus value paid by the buyer always have an effect, depending on the social and natural
environment.
Motive power for the development of the value
Specifically, it is not absolute needs that lead to value formation, but weighted, since usually the needs
of all buyers in terms of scope are always greater than their ability to satisfy them.
In society, the value has been created to conserve resources: An entrepreneur will try to get as much
consideration as possible with minimal effort. This counteracts the waste of resources on the
manufacturer side.
The buyer must give value equivalents for actual use values (subject to economic exchange) in order
to obtain them. This counteracts the waste of resources by accumulating unimportant things.
Value and resource conservation
The statement by F. Lordon "The core of doing business is to give less to get more" describes the
current capitalist use of value. In a more humane society, as described above, resource conservation
through value relations would be the focus. But the important principle of conserving resources should
remain in every society for the foreseeable future.
Ground rent
The statement by Dr. K. Nubukpo, capitalists who accumulate capital through land rent are merely
reindeer, I see, according to what has been written above, a little differently: they continue to be
capitalists who use the labor force of nature for value formation (regardless of whether this work is in
nature present or past, no matter whether these works were performed by the living or inanimate
nature), but often they do not pay at all or only in parts.
Workforce
Dr. Darmangeat mentions that humans speak of work and include animals.
With the updated interpretation of the labor theory of value according to the above explanations, it is
shown that besides humans also machines and parts of nature are called labor forces in the Marxian
sense, i.e. for value formation (in concrete terms, as in the case of the human labor force, to form the
foundations for value relations). The fact that the value is not produced on the production side of the
commodity, but is assigned to the commodities in the market, it does not matter how the reference
points of value relationships come about.
Decisive are sufficient quality increases, based on the raw materials that are not interesting for buyers,
so that buyers train weighted needs to the (initially potential) work products that lead to exchange –
work products of human and machine work as well as the work of nature.
The value is not formed directly by human labor, which was illustrated with the above-mentioned five
produced and two unsold devices. Before value creation, people estimate the work results.
Importance of the value is the non-free availability of commodities in conjunction with sufficiently
strong weighted needs.
Paid human and machine labor as well as paid (even unpaid but owned) manpower cause, among
other things, quality increases of raw materials that may be prerequisites for value relationships and
lead to non-availability of work products and related natural resources.
2019-11-20 - To the series of work, wage profit of arte-tv, discussion paper – 5
Here, the human labor needs means of subsistence food, housing, education, culture, etc., need the
mechanical workers (bought as slaves or leased as temporary workers) electricity, oil, repair services,
training z. By reprogramming, etc. The worker's nature is being bought or leased, e.g. in breweries, on
animal farms, etc., the means of subsistence are i.e. getting certain living conditions, feed feeding,
etc.). In many cases nature's means of subsistence are not paid, and the owners of the corresponding
shares of nature only pay for the costs of extraction and pocket the profits. This works because of the
age and the size of nature. But it is becoming increasingly clear that this cannot be done unlimited.
The importance of the market
A series of the TV series deals with the market.
The important thing is that the market neither thinks nor directs. People steer the market in the
respective social environment. How the market is used is therefore dependent on the society.
A society that does not use the market properly will not be able to make the economy efficient.
Unconditional basic income
Each increase in the machine-based share of commodity production creates more potential conditions
for the unconditional basic income.
Remarks
There is much to say on all issues, but especially on the market, the workforce and the Unconditional
Basic Income.
In two books I have written in more detail: "With Marx on the market economy?", Tectum
Wissenschaftsverlag, 2017, and "What is wrong with the labor value theory? How the value of the
value is really formed ", Grin-Verlag, 2019 (both are unfortunately only available in German).
Should it come to a discussion, I would, if necessary, these problems without further question
represent more detailed.
Fig.: "Value Ratio, Value, References of Value Ratio"
With best regards
Rainer Lippert
rainer.lippert@t-online.de