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labour theory of value

  A theory in economics about the origin of value which attributes its entire content to labour. The technical argument is explained in the entry on Marxian economics: briefly, all the necessary ingredients in the process of production have their origin in the expenditure of labour, which makes the machines (or capital equipment) capable of utilizing raw materials as well as running the factories, farms and so on in which production takes place. It follows that all the value added to otherwise valueless natural resources can ultimately be traced back to labour: hence the reference sometimes made to capital as \'dead labour\'.

As well as purporting to describe the technical process of production in a positive manner, the labour theory of value has normative content as contributing to a theory of social justice. Central to this is the concept of exploitation, whereby under capitalism those who own the means of production are able to take some of the value which labour has produced, i.e. surplus value. That the relationship between exploitation and distributive justice is subject to different interpretations reveals some fundamental issues which arise in linking Marxism to social justice.

Marx conceded that capitalist exchange relations (including the appropriation of surplus value by the capitalist class) are just according to the rules of capitalist society, and its prevailing ideology: they are in accordance with the law in that kind of society. This narrow and relativistic view of social justice has encouraged the interpretation that Marx was not interested in morality except as an aspect of ideology. However, while Marx does not actually describe surplus appropriation as unjust, he does refer to it in such terms as theft, embezzlement and robbery, which amounts to the same thing: to the invocation of universal normative standards. The way capitalists purchase labour-power under the wage contract may be just under \'bourgeois\' norms, in that they cover the value of labour-power as determined in the marketplace, but this level of surface appearances obscures what happens when labour is put to use, for it is able to produce something of greater value than what the workers in question are paid, and this surplus accrues to the capitalist. So, what appears to be equal exchange actually enables the capitalist to get something for nothing, the product of unpaid labour.

If exploitation is said to involve capitalist expropriation of what actually belongs to someone else, however, this implies a right or entitlement on the part of labour to the value of what it has produced. Marx is thus asserting a right to the product of natural attributes, which could be thought of as morally arbitrary in the sense of being an outcome of a natural lottery and therefore not a valid basis for desert. Indeed, the claim that people are entitled to realize the value of their holdings, including themselves, is a feature of the conservative philosophy of libertarianism. When Marx recognized payment by product as a right, but one which would eventually disappear under communism, he was again alluding to what might be considered just in a particular form of society. In place of \'bourgeois right\' as reward according to labour contribution, Marx advocated distribution according to need. Full communism was supposed to replace material scarcity with abundance and human selfishness by harmony, so that the axiom of \'from each according to ability and to each according to need\' would prevail.

What Marx had proposed implicitly, according to some Marxian scholars, was a conception of justice containing ordered principles. Under capitalism there is exploitation, whereby owners of the means of production take from the value produced by labour. Under the transitional form of socialist society which replaces capitalism, labour would get the value of its product. When communism finally triumphs, the superior distributional criterion of need comes into play.

The practical issue faced by socialist societies is (or was) how to combine some elements of distribution according to need with the expectation of some reward reflecting value of product so as to provide workers with the incentive to produce in a society still incorporating some individualistic attitudes. This is very similar to the problem faced by governments in liberal societies under capitalism, where criteria of need and contribution are both involved in the distribution of the value of production in the form of public services as well as remuneration. (DMS)

Suggested Reading Elster, J. 1985: Making sense of Marx. Cambridge: Cambridge University Press. Geras, N. 1985: The controversy about Marx and justice. New Left Review 150: 47-85. Geras, N. 1992: Bringing Marx to justice: an addendum and rejoinder. New Left Review 195: 37-69. McCarney, J. 1992: Marx and justice again. New Left Review 195: 29-36. Peffer, R.G. 1990: Marxism, Morality and Social Justice. Princeton: Princeton University Press. Smith, D.M. 1994: Geography and social justice. Oxford: Blackwell Publishers, 86-98.



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