Like many of my fellow hexbearians, I like to punish myself with the cognitohazard that is reddit. Today, I encountered this post, on a joke explanation subreddit, and it was accompanied by a particularly stupid series of comments from an r/neoliberal poster (who also had an AI Ghibli profile picture, truly a potent combo) claiming that Marx's LTV "falls apart under scrutiny" among other things. Essentially, the discussion seemed to center around the idea that, because a top OnlyFans earner makes so much more than the median, labor cant possibly explain the value they are creating, since the labor they are doing should be fairly similar.
I thought it would be a fun exercise in deepening my understanding of LTV to try and formulate arguments against this, and hopefully you feel inclined to add your own thoughts down below!
The first claim the neolib makes is that marx thought all labor was equal between individuals (lmao no he didnt) but hes rather swiftly shut down by someone bringing up Socially Necessary Labor Time. In an attempt to save himself from this obvious hole in his critique, he says a few things.
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He claims that marx's idea of Socially Necessary Labor Time, particularly the idea of the average productivity that a given laborer would be compared to, has a low standard deviation. I'm not sure if this is my ignorance on the subject or if hes pulling this out of his ass, but did Marx really imply this anywhere? He is obviously trying to imply that the difference between a top and median onlyfans earner is a massive deviation, and therefore Marx was wrong, but did Marx ever actually make a claim like this?
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He claims that Socially Necessary Labor Time does not have a rigorous mathematical definition because Marx was too bad at math to give it one. While I agree that what is "Socially Necessary" is up for some amount of debate, I feel like this is again a stupid thing to say when he is referencing the average. What rigorous mathematical definition is required to figure out an average? It really feels like hes trying to appeal to the complexity of modern western economics and their obtuse formulas (which ironically seem to have far less predictive power about reality than anything Marx ever said) when there is nothing particularly mathematically complicated about calculating this average, whats prohibitive is the collection of the data. Its a bit like saying it would be hard to figure out, with perfect accuracy, the average age of all humans on Earth. The math isnt whats hard, its finding every single persons age that is tedious.
The delusional ramblings of a neoliberal aside, I think there are some important factors missing from the discussion. For one, I would inquire how a neoliberal would seek to explain this phenomenon; could you really confidently say "This top earner is actually 10,000 times more attractive than the median one. If they are a 10, then the median earner must necessarily be a .001"? It seems a bit ridiculous to suggest that the attractiveness differential between any two individuals could be that high. But more importantly, I think theres a lot of "invisible" labor that is being ignored in order for the neoliberal to make his argument. Its easy to say "Top earner shoved this up their butt, median earner shoved this up their butt, they are doing the same labor", but anyone who is familiar with these types of services knows that its actually usually people that were already famous that have the largest platform. Basically, all the labor they did to amass that following is being ignored so that they can be equated. That doesnt even begin to mention the other labor that could potentially be separating these individuals; if the commodity you are selling is your body, what about all the labor that goes into its maintenance? All the dieting, working out, cosmetic surgery, etc that a top earner has both the means and the impetus to work towards, is not being factored into this labor comparison. All the constant capital in the form of high quality cameras, rented hotel rooms, ring lights, is again ignored when comparing profitability.
Finally, I remember marx saying something about nature being just as much a source of wealth as labor (I think its something particularly about use-value but thats where my understanding gets murky, would love to have that clarified), and in this case obviously if you are just born with massive honkers that is going to convey a definite advantage to you in your onlyfans career over someone born with neurofibromatosis.
I know this is probably the most ridiculous thing any of us could spend our intellectual energy on but I refuse to cede any ground to some dork neoliberal and was frustrated by my own inability to formulate a counter-argument, so I came here hoping the great minds of hexbear could dish out some wisdom on the subject. Heres the link to the comment thread if you want to see what the lib said for yourself: https://www.reddit.com/r/PeterExplainsTheJoke/comments/1kb4t77/comment/mpruwa4/
Marx's theory of labor value is particularly misunderstood because it is confused with the pre-Marxist labor theory of value from which it diverges significantly. (And honestly, people who haven't read him underestimate just how forward-thinking he really was).
Marx's theory of labor value is deeply related (I had previously stated "specifically", which is too strong a statement) to the growth in relative size of industries. Industries whose proportion of gross value added/revenue is greater than their proportion of workforce employment grow as a percentage of the economy, while the others shrink. This is the famous "law of value". As industries grow and shrink and compete, they find equilibrium at a point where every industry's gross value added/revenue is proportional to how many workers they employ.
That is the other side of the LTV that is much less known than the part about predicting the prices of commodities, but is very important to emphasis.
Marx's LTV is a statistical law, and even more than that, it doesn't even say that industry prices are proportional to the labor input
In fact, in pretty much any study of industrial prices you will find, the LTV predicts prices with less accuracy than the theory that industries tend to reach equilibrium in profit rates. This is not a problem for Marx's theory. In fact, this very difference in "rational prices" predicted by the LTV and the actual prices is what drives the time evolution of capitalist systems (and leads them to crisis after crisis).
He probably did, since standardization of production of production techniques and their effect on human society is a significant topic in Marxism. But this has nothing to do with the LTV. And furthermore, Marx was keenly aware of the existence of Artisanal industries and their difference from Mechanized industries. The process of conversion from the former to the latter is a major topic in Marxist theory. I don't know how dense you (not youYangJingyu) have to be to argue about Marx when you don't even know what topics he covered.
There is a fair bit more to this. Predicting labor theory of value prices is a very standard thing to do in the field of economic planning (if a bit computationally expensive). There is an exact formula for this (search up Leontieff matrices and input-output models) and even capitalist economies publish this data yearly. It's not as easy as calculating an average though.
I just want to comment that this is the best explanation for specifically Marx's labor theory of value I have seen in a while. I made a mistake conflating the pre-Marxist with the Marxist in my explanation, this one is much more true to the source.
I’m skeptical of it tbh. The explanation of Marx’s theory of value as a theory of relative industry sizes doesn’t sound right at all.
They are, however, correct that Marx diverged from the earlier political economists in some important aspects. Not all. Marx retains a lot from Ricardo despite spending most of his time differentiating from Ricardo. He wrote a comprehensive analysis of all the political economists he felt were relevant, including what he found defective or limiting in each; this is Theories of Surplus Value or familiarly “Capital volume 4”
Both effects are linked to one another. The regulation of prices around the point predicted by labor value occurs precisely because that is the equilibrium point at which industries can remain stable. Like a valley in which a ball can roll.
And I should point out that Marx's theory was completed after his death since he never resolved the transformation problem (which was most compellingly solved by David Zachariah and Alan Contrell, although other solutions have been proposed)
But yes, you are correct that Marx was getting a lot from Ricardo.
I should have probably gotten some quotes from Capital to substantiate my explanation. I'll do that today hopefully when I have some time
Does Marx talk about this relative industry size perspective of the law of value somewhere?
My understanding of the law of value is different: it means that the exchange ratio of any two commodities is regulated by the relative amount of socially necessary labor time required for their production. This definition is independent of industry size or number of employees.
Yes, this is also the law of value. What I have stated is the other side of the coin. The law of value regulates both prices and sizes of industries. I will look for a specific quote from Marx. Nevertheless, at least in modern marxist economics industrial growth and prices are strongly linked.
I found a text from stalin that talks about this side of the law of value from a practical standpoint.
Searching through Marx takes longer unfortunately, so I will need some time.
Sorry I wrongly commented to two different replies of yours before I found this one…
The chapter from Stalin is helpful to see where you are coming from, thank you. In context it makes sense how Stalin uses it to refer to the “sphere of operation” of value. He is, moreover, correct to discuss value as a concept tethered to the commodity form and equally waning in relevance as society moves toward socialism.
As a concept though, the law of value strictly means exchange proportional to value, or what is the same, the social distribution of labor through the equation of labor content in exchange.
I’m mostly stuck on the part of your explanation about revenue and employment as a fraction of the economy (meaning, I think, the total social revenue and employment, respectively, in value terms). Here it is important to be clear how the law of value determines the relative sizes of industries: through profit equalization. Capital is preferentially allocated toward more profitable industries and away from less profitable industries until the rate of profit is equalized. This dependence on profit, and not on surplus-value, means that there cannot be any proportionality between industry size and value added, because value and price are different. The law of value is responsible for the proportional allocation of labor between the various industries, but only indirectly through profit which is based on cost-price and not on value.
I think a lot of the confusion can be cleared up if you simply see that "social revenue" (as you call it) and "employment" are proportional to value and direct labor used (socially necessary labor time, but only the v part out of c s v).
The reason I am talking about the former rather than the latter however is that in practice, the latter "direct" quantities are typically measured in the former terms, where employment and "value added" constitute readily available data.
There is also the reason that for a lot of people, especially those who are less knowledgeable of Marxism, the explanation from employment and value added is much easier to understand.
This is a very complicated topic. I've looked into profit equalization quite a bit and the simple answer is that profit equalization doesn't exist in reality. There is a tendency for capital to adjust between industries on this basis, but real industries have a large profit variation spread.
The proportionality between industry size and value added is also just a tendency. It does not exist perfectly, there is a spread. This tendency is enforced from the fact that value is the physical limit of the economy. In an economy where labor is dominant constraint, and all prices correspond to LTV prices, both GDP (sum of monetary prices for all outputs) and total employment can remain constant while allowing any distribution of labor between sectors that you want. Basically, LTV prices allow for a maximum possible configuration space for an economy (constrained only by labor inputs, not by natural inputs).
Keeping the GDP constant, any random walk through the space of possible states of an economy defined by a (price, employment) vector for all sectors will spend much more time near the LTV price region than any other possible prices. And while the assumptions of a purely random walk and constant GDP are unrealistic, this property of LTV prices is effectively what makes them, and the concept of value so special.
A capitalist economy does move randomly to a great degree (even if not 100% randomly), and the GDP itself changes usually only 5% per year at the higher end.
I should probably also add that prices deviating from LTV prices is a huge component to all sorts of dynamics, such as the underdevelopment of agriculture, monopoly capitalism/imperialism, colonial practices and so on. And as it turns out, the overwhelming amount of discussion of these dynamics is done by socialists/marxists. Meanwhile it is liberals who always believe that prices (and thereby the market) are perfectly rational.
Could you point me to something basic on this topic? I'm not sure what the proper term to look for would be, but I'm interested in learning more about these differences between market price and LTV price
I'm fairly certain I remember reading about this difference in capital volume 3 itself, but as far as I remember, marx did not resolve the "transformation problem" as it was called and it was resolved after his death.
As for a source, I think one place to start could be https://www.marxists.org/archive/cafiero/1879/summary-of-capital.htm
Which is Carl cefiero's summarisation and English translation of capital, that got the seal of approval from marx himself.
Thank you