What was/is his criticism of the LTV, and why isn't it correct?
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Steve Keen
Cameron Garcia
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Dylan Taylor
His criticism of the LTV includes the idea that machinery can produce surplus value, just like ordinary human labor.
I would argue, like Marx did, that since machinery isn't an actor in the market, but only an object traded and consumed (even if its consumed productively), it can't create value but only transfer it between the worker who builds or maintains the machine and those who use it to produce a commodity.
So, like this,
Worker -> Machine -> Worker(w/ machine) -> Commodity
The machine has value, but can't create value. As it depreciates and wears out, this value is transferred to the commodities it produces.
Keen approaches this from the perspective of exchange-value being transformed into use-value then back into exchange-value throughout the process of production, which opens up an interesting perspective but kind of misses the point, imo.
Money (exchange value) -> Machine (use-value) -> Commodities (exchange-value) -> Consumption (use-value)
IIRC, Keen would say:
1. There is no reason to assume that the machine transfers exchange-value in a 1:1 ratio as it loses use-value
2. If the machine is transferring exchange-value at a great than 1:1 ratio, then it actually creates value.
Isaac Jones
isn't his explanation of use-value more accurate for contemporary economics then? since the use-value of a machine depends on the IP which it was built with, thus making its ratio to exchange-value not necessarily 1:1?
Blake Baker
The question would still be: is the machine creating value or simply transferring it?
I would argue that the use-value is always particular to a specific product, while the exchange-value (based upon underlying socially-necessary labor time for producing something) is the only part that's really fluid and can change forms between one commodity and another. So the schematic that Keen has used showing exchange-value transforming into use-value isn't really accurate since,
1. Use-value is always particular to a specific good and does not transfer (i.e. we can't really measure the use-value transferred from a tractor to a plot of land since we'd be comparing apples and oranges)
2. Exchange-value doesn't transform into use-value, but rather always appears side-by-side with it.
3. The thread that runs through all commodities is the living labor necessary to produce them and how this relationship changes depending on the productivity of labor of an individual good compared with all the rest.
Keen has proposed the idea a number of times (if I understand it correctly) that the basis of value is really energy and how human economies harness and acquire this energy, bringing it from the sphere of nature into the economic sphere. I haven't seen this idea fully expounded, but I would argue this (while a novel approach) misses the mark by not keeping the focus somehow on man. The Austrians argue for a subjective theory of value but largely assign price as the measure of that value, "something is worth whatever someone will pay for it." Marx keeps man as the subject in the formation of economic value, that is, he keeps value as something arising from man and not outside of him, like energy, but puts forward the theory of man's socially necessary labor time as forming the basis of values, around which prices tend to "orbit."
I went on a bit of tangent there…
Leo Harris
Is this whole issue of machinery acting as a multiplier of labor input actually relevant to the LTV being accurate or not?
Chase Lewis
Steve Keen also criticizes the LTV through saying that nature and physics are the ultimate source of value. For example sunlight heating the earth and creating weather patterns or the fact that it is possible to extract mechanical work out of an engine by burning fuel. His argument goes way too far down philosophical navel gazing and Marx acknowledges that nature is the source of all use values (and that capitalism destroys the ultimate source of all value). The LTV is obviously not meant to explain why entropy increases in a closed system or why time moves in one direction or why electromagnetism exists, these are all preconditions for labor and for producing value but irrelevant to discussions of economics.
Juan Gray
He doesn’t seem to realize what Marx means by commodity fetishism. Marx addresses this point directly.
The physical form of commodity is only a “depository” of value. And value is ultimately just a social relation between people. That is why the labor of animals or machines doesn’t count toward the value of commodities.
William Williams
This is really funny too, where does Steve Keen think surplus value comes from? It's from the sun, literally.
Adrian Russell
Also, in Marx's explanation, surplus value actually DOES indirectly come from things like machines (which are all ultimately powered by the sun) and the sun that don't directly produce value. Surplus value comes from the fact that it takes less labor to feed a man than the amount of labor he can do. When you have better farmlands (soil, climate), surplus increases. When you have better machinery, surplus increases (by reducing cost of labor power). It's just that the energy from these external systems enters the economy through labor.
Aaron Butler
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Grayson Jackson
no really though, how on Earth can you sell something with zero exchange value (software) or positive exchange value, but hugely inflated by """"""IP""""". I'm waiting for an explanation that doesn't involve the State telling you that you can't copy this or that, or you get jailed.
Christian Carter
It's just rent. Selling software is just rent seeking, pure and simple.
Parker Gray
at first I thought it's a garbage trite answer, but after consideration I see that it's a good explanation; thanks user.
Noah Green
Software is funded in a number of ways:
- advertising. the user is the laborer who generates data that is used to bring commodities to the point of sale.
- subscriptions. this is tricky, possibly a mix of services and rent. you are paying for programmer labor power and then some, as programmer labor power generally costs more than their actual labor output.
- commodified services / discrete purchases. like Steam games. you pay for programmer labor power. once that's paid off, the prices have a huge dip, hence Steam Summer sales and old games selling for $5. Also possibly a rent element to this. also complicated by large amount of artistic work involved in making games. notably, wages are lower in game industry than rest of software industry, bordering on proletarianized.
- micropurchases / "loot crates". a twist on the above. much of this is just aesthetic, and may not exactly constitute software.
- plain business services. this is just contracting out software work. paying rent and programmer labor power.
Gavin Nelson
Source on the image? Looks comfy.
Juan Miller
The predominance of modern exchange being based on rent instead of free competition is easily reconciled with Marxist theory, and even anticipated in his works. All these new theorists sound like total brainlets when they see service economies and go "AHA! Look at how wrong Marx was, he only focused on competitive industrial production".
Noah Bell
Brainlet here. So from what I understand from this thread, Keen's criticism of the LTV is based on the idea of a transformation from exchange value to use value, and that machines produce a greater use value than what is lost by their depreciation, thus creating value. The counterargument to this is that there is no such thing as a transformation between exchange- and use values. Use value is a subjective property inherent to the product and exchange value is merely a social relation that cannot exist without the human, and thus the idea that you can convert one to the other is commodity fetishism (treating value as an objective, physical property of the product). Did I get it right?
Xavier Scott
So exchange value expresses only the social relation, namely the ability to have someone work for you for an amount of time, expressed in money? Or the ability to get a commodity for which someone had to work for an amount of time to produce
David Taylor
Isn't that the guy who got scammed by Coach Red Pill?
Evan King
I agree with your summary but would change this one part:
Use-value is an objective property inherent to the product, such as 10 yards of linen, 2 tons of steel, etc. It's something that can be measured objectively. But even though a machine might be necessary to produce something, the transfer of use-value from a machine to its products isn't really measureable since all these use-values are different and exist only concretely, unlike exchange-value which is a universal measure held in common by all commodities.
I would agree, yes.
In the pdf I've attached Keen actually lays out his arguments in depth if you want to give it a look.
Bentley Price
Are you serious? 90% of costs in software development is from wages. If anything, software dev is maybe the most labor intensive industry of the "third industrial revolution"
The problem with IP is that, as Zizek says, digital goods tend to escape the confines of the traditional commodity: For Marx to have a commodity you need to have a physical manifestation of it, that outlasts the act of creation. The best example is music, it became an industry in the fullest sense of the word only when the recorder was invented, allowing for voice to be taken and reproduced for the purposes of exchange outside the limits of the musical performance. The issue of course is that once a digital good reaches the digital market, it essentially ceases to have production costs, so the only way to make a profit is to build fences around it, the same way you would profit from a river by sealing it off from society.
Jeremiah Morris
The whole energy argument (if i understand what you said) is just a "theory of oil" rehashed. You could look at the whole economy on the basis of how much oil is used to make something. You could look at so many pounds of plastic and say "Okay, this takes 100 barrels" or you could look at so many pounds of fish and say "Okay this takes 30 barrells of oil", and then you could pat yourself on the back for the root of all value. But, when you go to see how many barrels of oil it takes to produce a barrel of oil, you will find that it takes less than a barrel of oil to get a barrel of oil, so you might, for instance, find that it takes .7 barrels of oil to get one barrel of oil. Suddenly, all of your prior exchanges are incorrect, and you have to lower them to .7 barrels or however you would work that out. Then, you check again, and you realize it takes .8 barrels to get your new barrel unit…. You can do this until you die of old age, and you will never get to the bottom of it. That is the problem with these "theories of (Non-Labor)".
You take the labor theory of value, however, and you have the utterly and completely irreducible idea of time. You can't use three seconds of time to get four seconds of time. It is a unit that stays constant when you measure it against itself.
This doesnt BTFO the theory of value, it EXACTLY proves it. Software is an area where the Capitalist market place can NOT function without the State, and is one of the most immediately obvious areas of this.
You have a product that takes so much labor and then so many resources to make, so you hire your programmers and you get your computers right. You then get all of the other people and things I cant be fucked to write about.
No matter how much money, time, materials, etc… you spend making that softawre, the finished product will actually create a situation where anyone can "produce" the game through pirating, with practically zero cost to themselves. Exchange value wise, most software has practically no value, and thusly requires extensive protection through punishments, security, and so on…
There is no way to justify payment in a Capitalist marketplace for pure software outside of the functions of the state, in which ideas like copyright exist. Pure software, as in software that exist isolated on a computer, or functionally so. As in, it does not make use of company servers or what not, as you could at least argue that they are paying for the servers or what not.
William Bennett
lmao fucking read Marx. Programmers are petty booj, their wages are higher in labor value than the actual time they labor.
I could spot this brain poison a mile away. READ MARX. PUT DOWN THE FUNNY COCAINE MEME MAN AND READ MARX.
William Brown
That's what surplus labor is from though.
Cockshott goes over this in this video:
youtu.be
There's nothing inherently wrong with using other measures of value, they're just don't stand up to scientific testing. Energy, steel, computers, and so on do not have a correlation with industry monetary output, while labor does.
Robert Martinez
the rest of your point is decent, but the state directs most of its efforts towards protecting private property and commodities, this is not unique to IP.
Chase Brooks
LMAO I think its you who needs to read Marx.
LMAO based on what? Your feels, your obviously a brainlet that doesn't know anything about STEM, the value and efficiencies IT has created are staggering and the surplus value that was produced is what's allowed profits to continue to grow. Next revolution will probably be in genetics.
Jayden Morales
This is the level of debate expected from a brain-damaged Zizek/Chapo tard.
I'm a software engineer.
Technology does not create economic value. IT decreases constant capital costs and unproductive costs by making comms, transport, transaction, etc more efficient, and thus increases the rate of profit. It does not directly increase the rate of surplus. It can and does indirectly increase the rate of surplus by reducing the cost of labor power.
In no way whatsoever are programmers exploited, they are often helping increase exploitation of proles (IE they are bureaucrats/clerks) or even doing the exploitation themselves (they are petty booj living off of user labor).
Not produced by programmers, produced by proles.
READ MARX
I know you haven't, now put down the video games and hentai and read a fucking book:
marxists.org
marxists.org
marxists.org
marxists.org
Robert Phillips
private property works the same fucking way.
Jaxon Allen
Good thing I am the one needing to read Marx, since:
1-I was talking about the labor/capital proportion, in other words the organic composition of capital within the industry. user was saying that software is without value, and it is clearly not true.
2-Petite bourgeois are small capital owners, not rich workers. If anything, software devs are labor aristocracy in the Leninist sense.
3-Saying that they produce more labor per labor just plainy does not mean anything.
I'd say you should read both and actually try to understand what you're reading, but you do you my user.
You have a point here, but you are putting different jobs together for no reason. The software dev that produces code is not a petite bourgeois, it is merely a (generally) highly paid worker, who does produce surplus value, an IT worker is part of the category of "unproductive labor" or the side that manages pure capital and (as you say) does not produce surplus value.
My father and half my friends are engineers, I know a thing or two about the industry as well.
I think the problem here is actually what I was already talking about: software, just like all digital goods, is a difficult commodity to deal with in purely Marxist terms. They have a high labor content, yet their reproduction costs are negligible; they are objects that outlast their generating performance, yet they do not have physical presence.
I think you do have a very good point on this: if we think on more materialist terms, productive labor (aka value generatig labor) must create something tangible and accumulable, something that by virtue of accumulation itself can make society progress/grow/function/survive; this is why management is not productive labor, as is lawyering or providing medical care, while producing a bunch of cars is.
Software I think is in this awkward spot in the middle of this division, hence our problem.
William Price
Software does not enter into the organic composition of capital, it only enters production as a cost or a cost reduction. Source code IS a repository of value, but its value can't enter a commodity, because it is just a blueprint and doesn't depreciate. Thus the labor spent on software development is a plain cost.
No, programmers are not workers at all. Most of them profit off of stock options and investments, as well as many making ~100k+ per year (bourgeois wages per Yakovenko's calculations, see pic). They don't produce commodities, and they exploit users.
What I'm saying is that someone who makes, say, $350 per day working 8 hours per day is getting more labor value back from the system than the amount of labor they worked that day. Objectively a person like that is:
a. not exploited
b. exploiting others
Actually quite the reverse. An IT technician who has to handle upkeep of actual computer hardware in production, and fix software issues that make the hardware unusuable, is actually part of production and is a worker and possibly a professional worker– and many of these jobs are totally proletarianized, see helpdesk workers. In contrast, software developers are not workers for all the reasons I have laid out.
The vast majority of software is not even sold in a commodified fashion any more. It's all SAAS, ad money, or automation of clerical work.
Lincoln Lopez
This difference to unskilled labour appears very high, but first of all, the time a skilled worker is officially working as an employed person fails to include the time learning things. And second: Suppose in a company with piece-wage, somebody is working much faster than most. You wouldn't say he's exploiting the others, right? So I don't think it's sensible to jump from the hourly pay to a conclusion that X % of that person's income (anything above average?) must be benefit from exploiting others.
Elijah Ortiz
Time spent learning things goes towards development of labor power, which is one reason why programmer labor power is expensive. Another reason is that the average cost of a college degree is part of the cost of their labor power. This is time spent on self-improvement, and is not going into the value of the source code. As well, most programmers spend ample time learning and doing research on the job, and spend comparatively little time learning in their spare time.
As an aside, an interesting feature of "work" in general is that it develops the labor power of the worker to a lesser or greater extent by giving them experience. This explains why worker's wages go up the longer they work in a particular field.
Of course not, this is simply a higher density of labor. Said worker will be paid for their greater expenditure of labor power while still being exploited, as they had a corresponding greater output of labor. This has nothing to do with programmers, especially since it is seemingly impossible to quantify and measure programmer output.
It doesn't matter how "hard" a programmer works in a day (again, can't be measured), his wages are far higher than his labor output in that day. This means he never works for free, and in fact is literally profiting. It's a separate issue that his work is not economically productive, since many people in unproductive sectors are paid typical wages.
Zachary Young
I am almost certain I was listening to a podcast with Paul Dickblast about how you can reduce oil and what not, but not time. That is the thing inherently wrong with these things, not that they "dont stand up to scientific testing". You CAN link these things to industrial output, they just fail when you link them to themselves. Your video, while interesting, only shows a superior aspect of labor to oil/electricity, whcih I obviously already agreed with. Furthermore, it still shows the linkability of oil/electricity to industry. They clearly went up as labor did, just that, as I said, labor was absolutely superior.
Why not give evidence for your claim "you can get four seconds of labor out of three seconds of labor". That is infinitely more interesting to me. I am not a marxist economic, but I am pretty much certain that is wrong. Surplus value comes from Value - Variable Costs -Fixed Costs. I cant remember if those terms are exactly correct, but Marx made it pretty clear that surplus value is the differences between wages + fixed costs and the value of a product.
Joshua Taylor
Yes, it was Paul Dickblast who said this. I am crunched for time so I cant tell you when he says it, but he says it here.
fromalpha2omega.podomatic.com
Cooper Richardson
Very simple. Surplus labor comes from people's ability to work longer than they need to survive. So, you can give a man four labor hours worth of food, and he produces eight hours worth of food in return. This is possible because food grows in sunlight, doing most of the process of production for us.
Maybe I'm not understanding what you mean, but to my understanding, this is like "four seconds of labor out of three seconds of labor," and can be compared to "0.7 barrels of oil to get one barrel of oil."
I'll be curious to listen when you can get the timestamp later.
Liam Bennett
t. retard who doesn't understand basic Marxist terminology. Petty bourgeois is a term for the small business-owners who don't have the enormous capital of larger industrial capitalists and thus have slightly different class interests. It literally means 'small capitalist'. Having a shitty STEM degree and earning a slightly higher wage does not make you a petty booj.
The idea that programmers are petty booj is pretty ironic considering how exploitative the IT sector can be - what with the prevalence of unpaid internships and extreme, often uncompensated, overtime. The industry is ripe for unionisation.
Jackson Sanders
AHAHAHAH. I have finally gotten to the bottom of this! I was watching Paul Cockshott, and I think I know how you have confused surplus value.
You have confused the idea of wages, and thusly, surplus value. Wages are the commodity price of reproducing labour. Labor reproduces itself in so many fractions of an hour, but I dont think that reduces the actual value of the whole labor hour. Maybe it does though…. hmmmm.
Either way, I believe you confused surplus value. Here is the Paul Cockshott video I was watching.
m.youtube.com
Christopher Rivera
No, but having a bourgeois level of income (see ) and profiting from stocks and user labor does.
All the programmers I know are getting paid $30 or even $50 an hour at internships.
No, they're the price of reproducing labor power.
Only if someone is eating while working. Otherwise, you're talking about turnover of variable capital.
It doesn't, but surplus = labor time - cost of labor power.
Hunter Stewart
yeah a lot of people ignore this. automation just means tools that wagecucks have to use are getting more efficient, not that they're being replaced.
Logan Kelly
Again? Classes have nothing to do with wealth. Stop this please, it's getting silly.
John Jones
not op but IT workers are very definitely not booj… they might make a lot of money but they are very far from being bourgeoise. maybe Petit bourgeois, many definitely become lapdogs to bourgeoisie.
Alexander Davis
Income is irrelevant to the bourgeoisie. I think you don't understand just how rich and powerful these guys are. 200k USD is cheap change and it's more than what most IT workers make. (still a bourgeoise might have an income which is LOWER than an IT worker, but their net worth usually increases much more than their income)
Having stocks does not make you bourgeoisie, otherwise all the proles that have a retirement fund (401k) would not be proles.
(sorry for double posting)
Cooper Taylor
You have to be literally retarded to think this. Just because a few porkies are poor and a few workers are relatively well-off, doesn't mean wealth and class are unrelated.
that's what I said tho, they are petty booj
You're just contradicting yourself. I'm pointing out the evidence, ~$100k is the point where your income stops obeying a normal distribution and becomes part of a Pareto distribution. It isn't conclusive proof on its own, but combined with other factors, it is obvious that programmers are petty booj.
The vast majority of proles don't have retirement funds, and the 401k deal is one of the reasons why boomers are so boojified. In contrast to simply having retirement funds however, programmers and similarly wealthy professionals actively invest in the stock market and make significant profits (as well as getting stock options), since they have an income that provides a substantial basis for investment.
Zachary Wright
First of all, name any capitalist who could be considered poor. Saying that is just silly. Of course there is a relation between wealth and class - to own capital you must be wealthy and to be truly wealthy you must own capital. However, this misses the point. Your class is not determined by having x amount money, it is determined by your relation to production. Do you own capital or do you have to sell your labour to survive. Some boomer with a million dollar inheritance may be wealthy, but if he doesn't actually invest that wealth into capital then he is irrelevant since he does not actually engage in production except as a passive consumer. An IT worker might earn a disproportionately high wage because he entered a booming industry (and that wage might make him more class-cucked than most, or enable him to enter the petit bourgeoisie as yet another startup "entrepreneur"), but once that boom wears off he's just as fucked as the rest of us.
Lucas Gonzalez
>You're just contradicting yourself. I'm pointing out the evidence,
Samuel Gomez
petty booj with a taco truck and two employees for instance could be poor.
Yes, and I went over this already.
Most of these programmers genuinely fall in the former camp. One caveat I'll admit is that American programmers are paid far more than programmers in many other countries.
Spoiler alert, the boomers all invest.
Cooper Bell
If you can afford to own a taco truck and pay for two employees, you are almost by definition not poor. Someone who can barely afford to make ends meet, who does not have any disposable income to pay for healthcare if they get sick, is in no position to own anything. You have no idea what poverty is.
No they don't. And before you bring up, "muh shares", a lot of workers get paid in shares nowadays. It is part of a scheme to fool them into thinking they are not wage labourers, a scheme that you happily fall for. The shares are usually miniscule, do not give them any voting power in shareholder meetings, and are not nearly enough for them to sustain themselves through unearned labour. That is when it isn't just a scheme a shitty startups to not pay their workers a proper wage on the promise that their worthless shares will make them millionaires one day (reminder that these startups usually fail). Your fucking pension plan gives you more shares than this shit.
-→ The point
-→ Your head
I am giving a hypothetical example that shows how wealth alone does not determine class. If you are too stupid to comprehend even that, you are in no position to discuss Marxist theory.
Blake Morales
Steve Keen BTFO, no one wants to discuss his theory.
Brandon Jenkins
...
Aiden Lewis
Keen's criticism is on theoretical grounds but there's a shit ton of empirical data suggesting the LTV holds water (see Pasinetti, Shaikh, Cockshott). Keen seems to just dismiss all that and doesn't address it at all.
John Peterson
I heard an interview with Keen where he claims that Marx contradicts himself, specifically that his attempts to solve the transformation problem in Capital Vol. 3 undermine the LTV. If labour is the only source of surplus value i.e. profit, there is a TRPF, but Marx seems to hint at the fact this may not be the case because of profit variation between commodities and, from what I've read, still no consistent, applicable method of determining a price magnitude from a value. Perhaps this is related to the machinery argument from the start of the thread.
Thoughts?
Caleb Jenkins
I think you need to make an actual transcript of the interview or present argument in full some other way, rather than suggest to guess what exactly was meant.
I mean, what the hell this supposed to mean?
Henry Lopez
youtube.com
Ok, I found it. It's 20:10 into this video.
Sorry, I wrote that really confusingly as well. I guess I just meant in Volume 3, Chapter 9 of Capital, Marx outlines the composition of capital varies between markets and gives examples of how varying composition of capital affects the rate of profit even whilst the surplus value remains the same relative to labour. From my understanding, this seems to be a concession that the determination of prices, and therefore profit, are determined by all capital inputs (both in terms of use value and exchange value) which undermines the TRPF. I think that's Keen's argument as well.
I don't know if that makes sense still, I'm really bad at explaining what I mean.
Ryan Jenkins
Meant to respond to this post
Matthew Russell
I'll try to answer though I'm not sure if I'm totally understanding the contentions, but I don't think it is that labor is the only source of surplus value in the sense you are speaking of, it is that labor is a universal input for economic production and so surplus value is always measured against standard labor productivity. There can be a myriad of factors which effect standard labor productivity, including heterogeneous capital goods, and this in turn effects the price, but the equality between all of them still remains labor. So it may be that one commodity has its price determined as labor, plus this specific type of fixed capital, plus some raw material that has its own price specificities, and then another has a separate set of qualities in those categories, but labor is still there. So these unknowns just become assumed as a part of the process of production for labor in this particular industry or whatever. Instead of saying 5 labor hours and a handsaw, we just say it takes 5 labor hours.
But in the case that Keen is extending this to autonomous machines, I think that starts exiting the labor theory of value as Marx laid it out. We would basically be looking at some variation on a slave economy. I think Isaac Asimov had a book in which one of the outer colonies was populated by a bunch of supermassive property owners with the equivalent of entire states to themselves, and there'd just be armies of robots running around generating goods and services for them to consume. I'd honestly imagine that if it were possible, that'd basically be the logic of a world in which machines are capable of autonomously generating value. It wouldn't happen all at once, but I figure there'd start being these industrial segments entirely dominated by autonomous machine labor, which would start usurping the market system as the machine lords just accrued more property and capital goods to themselves, and saw less need to actually produce for the market.
Lucas Lopez
It's very simple:
If constant capital / variable capital goes up, ROP goes down. Since constant capital is just a cost that has to be reproduced through sale, and can't generate surplus.
If constant / variable goes down, ROP goes up.