In the last post I questioned G.A. Cohen’s critique of the Labour Theory of Value, which comes in two parts: (1) the LTV involves a mistaken idea that labour creates value; (2) Marx’s theory of exploitation can be retained without the LTV.
These have been taken as established by some Analytic Marxists. And I was told by a very reliable source that Cohen saw this article as his best work. So I’m stepping carefully here and very willing to be corrected.
I didn’t say much about (1). Cohen’s argument is, roughly, that what determines value in Marx’s system is not the labour hours that went into a commodity when it was made, but rather the labour hours that it would take to make the commodity now. For this reason, he says, labour can’t create value. The labour that determines the value of the commodity is counterfactual labour — the labour it would take to make it now — not actual labour. And counterfactual labour is an abstract thing and can’t create anything.
I don’t dispute any of that. Cohen’s argument works. But I don’t think the LTV requires any reference to value-creation (although, as I said, Marx sometimes uses that term). Rather, the LTV holds that labour is a source of surplus value, and this means only that the exchange-value of labour-power— the hours it takes to produce subsistence for a worker — is less than the hours the worker can work on that subsistence. We can measure all this in terms of counterfactual labour and still get the crucial result.
I did take issue with (2). Without the LTV, I don’t see how you can make this vital distinction between the exchange-value of labour-power and the hours actually worked, since the measure there is labour: hours of socially necessary labour-time. Cohen argues that we could say that workers are exploited simply because they produce the whole product but they only receive some of the value of the product.
We can say that, but whether it is convincing is another story.
My point was that if value is to be read off exchange without an underlying theory of value, as Cohen proposes, then it’s very easy to argue that the workers receive the full value of the product, with time-discounting applied. So the capitalist reaps the reward of waiting, just like on the neoclassical theory. You can’t do that with the LTV precisely because of what Cohen sees as its weakness: the fact that it’s a synchronic measure — value is measured in terms of how much labour things would take now, so that there’s no question of time-discounting.
Beyond that, however, I don’t really see the power in Cohen’s argument. A capitalist apologist could argue that it’s exploitation if somebody who contributes to the production of something doesn’t receive any of its value. And the capitalist supplies capital; is that not a contribution? Should the capitalist get nothing at all for that contribution? Isn’t that a sort of exploitation? As Marx’s capitalist asks (in Chapter Seven of Capital Volume 1): “Can the labourer, merely with his arms and legs, produce commodities out of nothing? Did I not supply him with the materials, by means of which, and in which alone, his labour could be embodied”. And what about the rentiers, who supplied the land on which production took place? Haven’t they contributed too?
Marx, by the way, isn’t quoting the capitalist making a moral argument there. The capitalist is trying to explain the source of surplus value, obscuring its real source in labour-power. In Theories of Surplus Value, Marx accuses Smith of mistaking an explanation of why the capitalist should want to earn profit for an explanation of why the capitalist is able to earn profit. Likewise here. Marx is trying to explain the mechanics, not to make moral judgments. In fact bringing in moral judgments obscures the real issues.
My point , however, is that if the capitalist’s argument were made as a moral argument, it wouldn’t seem obviously inferior to Cohen’s argument. One says: “the workers did all the producing; they should get all the value”. The other says: “the capitalist did some of the contributing; they should get some of the value”. People will also argue that if the suppliers of capital and land receive nothing, they won’t supply capital and land, and then production won’t occur, or will be reduced to subsistence levels. Is that a consequentialist argument against Cohen? By taking the argument in this direction, Cohen is, I think, walking into a minefield.
With Marx it is much simpler. The issue isn’t a moral issue about just distribution of the value of the product. It is simply a matter of value-input versus value-output: less labour-value goes into the workforce than comes out of it.
Representing the extraction of surplus value in this way leads not so much to a moral question as to a sociological one. Why are capitalists able to extract more hours from the worker than they supply? Clearly this is not a relation of exchange — otherwise value would exchange for value. So it is some other sort of relation, and in this relation we find the specific historical conditions of capitalism. This is one thing that makes Capital a critique of political economy. Political economy derives economic outcomes from ahistorical relations that follow universal laws, such as the law of value. Capital finds at the heart of capitalism something that can’t be explained by such ahistorical and universal laws.
Cohen reduces Marx’s discussion of surplus value to a mere piece of moral insistence, based on the undefended and not all that powerful intuition, that only producers, and not other contributors to the production-process, are entitled to any share of the product’s value.
As it stands, by the way, I think the LTV is wrong. Marx makes some grave mistakes in arguing that fixed capital and even land can’t also be sources of surplus value. Why couldn’t, e.g., a machine work for more hours than it takes to build and maintain? Marx’s arguments against this possibility are unconvincing.
With that goes any support for the hypothesis of the falling rate of profit, or long-run tendency of the rate of profit to fall, though there is plenty else wrong with that hypothesis.
Still, the important result — that workers are exploited — remains in place even if you acknowledge other factors of production as sources of surplus value. Marx’s arguments that labour is a source of surplus value remain convincing.
So in a sense I agree with Cohen’s conclusions. The LTV is wrong. And the story of exploitation doesn’t require it to be true. But the meaning of both statements is different from that given by Cohen.
For one thing, I mean by “exploitation” what Marx meant by it: the extraction of surplus value from labour-power (perhaps also from other factors of production), rather than what Cohen means, a less than 100% wage-share of the value of production. The main point about exploitation is not, as Cohen suggests, that it violates some arbitrary moral intuition about who should get how much of the value of a product. It is that it depends on a contingent and fragile historical arrangement that workers might have a mind to change.