- Capitalism and Alternatives -

use-exchange-profit and a lack of exploitation.

Posted by: Gee ( si ) on November 01, 1999 at 14:15:27:

The post I made below regarding the labor theory of value sparked some interesting debate (and some pointless sniping). The purpose was not to 'bury' the LTV but to conclude that neither it, nor any other useful economic model offers 'scientific' proof of exploitation.

In previous discussion with RD, in which I learned a fair bit, I came to the conclusion expressed since that LTV must be 'tacked on' post exchange to produce data on 'labor value' from which mathematical models purport to calculate the amount of 'surplus value' exploited from the worker. I also concluded that profits are the wage of the entreprenuer, I shall explain this in the form of a 'light' story.

Imagine that Joe wants things to sit down on - he has a use for them. Perusing the area he notices a worker, some wood and some tools. "darn it" he concludes "What use is that to a fellow who wants to sit on things" and leaves frustrated.

A second fellow, Mr E, sees this and thinks "hmmmm, Joe wants something to sit on huh? I know what I'll do, I shall design a chair and a way to make it!" After doing this Mr E looks around sees the worker, the wood and the tools "thats what *I* have a use for - for it will enable my chair"

He goes to the worker "Hi I have a use for you"
"Will you come and do these things?" he says pointing at his plan
"Why should I?" responds the worker
"oh, ermm - I'll give you $5"

Same with the tools and the wood - he says "I have a use for them" receives a blank face and Mr E ends up offering something in return - $5 each.

The use either Joe has for a chair, or Mr E has for these things is an intangible but to express it in a manner which compatible with the principle of trading a value for a value they must arrive at an exchange value. Exchange value is the only useful guide to a persons use value, its the only concrete evidence offered. Everything else is 'giving opinions' or its utilitarianism - which socialists must decry (see below).

Within an hour, following the design, Mr E sees his chair made and offers it to Joe (the chair doesnt belong to the worker, the wood or the tools, Mr E's $5 notes 'belong' to them). The chair belongs to Mr E - he bought the service of worker/wood/tools.
"Wow, I love chairs"
Mr E thinks 'hmmmm' and says "its yours for $100"
Joe says "no way, but I'll give $20" and the exchange occurs.

So what happened? Joe had a use-value, a desire, for something to sit on. Joe had no use for workers, wood or tools whatsoever and would give nothing in exchange for such. Mr E, in order to satisfy Joe's desire designed a means of producing the chair and had to *create* for himself a use-value, desire, for the worker, wood and tools and offers something in return for those things to express that use-value as an exchange value. Upon the creation of the chair - the existence of which is only *actualised* by the existence of Mr E he exchanges the chair for $20 with happy Joe. The 'wages' are - wood $5, Tools $5, worker $5, Mr E $5.

Profits are the difference between the use-value (expressed in the exchanged value, not as some disembodied concept) of the product to the end user and the use-value (like wise expressed as exchange value) of the components of its manufacture to the entreprenuer.

No one is exploited. In an alternate ending, Joe only offers $10 - leaving Mr E with minus $5 - tough luck, he took the gamble.

To repeat the main points;

The product doesnt exist within worker, tools and materials - its actualised by what makes it possible for these factors to be organised in the creation of it.

Amorally it doesnt matter if the enabler is the worker himself, Our innovative and lovely Mr E, or a fat spiteful inheritor using his vast fortune as advised by his employed advisors without thinking or moving himself. All three of them would have enabled the above process and for doing so they receive their wage of profit.

'Exploitation' as an issue is nothing to do with calculable economics or 'science', its a moral-philosophical question about who 'deserves' what according to various people's views of what 'ought' to be the case.

In socialism the intent is to do away with exchange value, the concrete evidence of use-value, because some people have more to exchange than others and so it is inegalitarian. What it leaves society with though are an endless stream of desires called use-values which have no objective base (not objective-utilitarian - that would requrie prioritisation of goods regardless of democratic wishes), which could, stooped in subjectivism alone, literally be anything and are subject to popular vote and no other thing.

It is that which I believe will lead to chaos and generate authoritarian compulsion - no doubt by whichever 'temporary' party / vanguard which in reality is the only way any large group of people can be organised into a socialist society.

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