[iDC] Answers to Postings about Marx, Labour Theory of Value

Christian.Fuchs at sbg.ac.at Christian.Fuchs at sbg.ac.at
Fri Nov 6 05:13:30 UTC 2009

Dear list members,

Brian Holmes wrote:
> Rather than wanting to discover some hidden productivity in social media
> that would allow you to explain with Marx's 19th century concepts why
> the contemporary capitalist bothers to invest in the likes of Facebook,
> could we not find an explanation that corresponds at least minimally to
> what we have before our eyes? I see two things at work here, neither of
> which Marx had much to say about. One, and the most important by far, is
> the will of capitalists to prey on middle-class consumers via complex
> and not always particularly functional formulas, algorithms, schemes,
> tricks, which by now have become the common stuff of our mendacious and
> conniving commercial culture, from the most complex derivatives to the
> simplest advertising via the surveillance, audience metrics and
> statistical tabulation of online behavior that many people on this list
> have described in detail. Consumers' acts are scrutinized and their
> psychology is analyzed in extreme detail because there is money to be
> made by selling them things -- for unlike Marx's proletarians, the
> people who use the Internet very often have savings accounts and
> fungible assets and retirement packages and life insurance portfolios,
> etc etc etc.
Surveillance is an aspect that Marx discussed in Capital, Vol. I. Advertising is an aspect of ideology and Marx had much to say about. True, one must re-interpret and further develop Marx's categories, I am not saying that Marx wrote about everything, his own thought was historical, therefore the categories he used need to be adapted to contemporary society, which is the consequence of a historical materialist approach. Only thing I am saying is that Marx has been too long ignored due to the postmodern turn and should now be re-read and re-interpreted. If people have a problem with that, then it has in most cases political reasons and not theoretical reasons. My own re-interpretation of class theory is that not only wage labour produces surplus value. This is important also due to political reasons because home technology use has become more important, the unemployed, houseworkers and other reproductive workers have become much more important. These phenomena need to be addressed by class theory.

> You do not need the labor theory of value to know why a salesman wants
> to sell you a product, and why he or she might arrange for you an
> agreeable environment within which, or as a consequence of which, that
> product might be sold. Nor do you need the theory of an attention
> economy either, I'm afraid. But you would have to admit that most
> Internet users are being treated as marks, that is, as unwitting targets
> of someone else's predatory strategy, and that they usually have a lot
> more to lose than their chains. Apparently these admissions are somehow
> unpleasant, so we reach for our Marx. Hmmm, marks, Marx, I never noticed
> that before. Yes, it's sad and quite undignified that middle-class
> people are being treated like marks, but they are, as every aspect of
> the recent housing boom has shown; and I don't know why concocting
> intricate theories to describe them as proletarians makes it any less
> banal or disagreeable. After all, proletarian labor is pretty banal and
> disagreeable too, just entirely different from middle-class consumption.
The advantage of interpreting not only wage labour as productive labour is that Marxism can be combined with aspects of feminism (Werlhof and Mies and others introduced the notion of reproductive labour, housewifization, etc for class theory), anti-racism, the assumption that also the unemployed and the poor are exploited classes, etc. This is an important political move that questions the wage labour fetishism that has for a long time dominated Marxism. What I am arguing for is a theory of surplus value that allows to merge different political subjects positions in the concepts of class and exploitation. For me the important concept is surplus value.

> The other thing that I see happening on the Internet these days -- and
> here I think Michael Bauwens is quite right -- is the relative autonomy
> of people trying to enjoy themselves and cooperate more or less
> playfully with others. If you take some care, you can indeed increase
> the degree of that relative autonomy, and it is a very good thing to do,
> especially when so many predatory corporations are expending so much
> time and energy building virtual worlds in which to channel your
> energies and manipulate your emotions and your beliefs, the better to
> pick your pocket. The article by Greg Elmer and friends that Bauwens
> forwarded explains all that very well, and without even mentioning the
> labor theory of value! Because in this context, it's simply unnecessary.
> The one thing that the misplaced use of Marx does achieve, I suppose, is
> to distract the attention from any consideration of the varieties and
> qualities and sources of care for one's autonomy: that is, one's
> capacity to search, in the company of others, for ways of consciously
> shaping the basic relations of coexistence. I guess we could pay a
> little more attention to that, for all kinds of returns.
Negri says that the "theory of surplus value is in consequence immediately the theory of exploitation”. The theory of value and surplus value is still important today in order to stress that humans are still exploited by capital. It has political implications. I do understand, but do not agree, that some scholars focus on other aspects such as attention (attention economy), surveillance (surveillance society), emotions (affective labour), cognition (cognitive capitalism), communication (communicative capitalism) etc in order to describe contemporary society and think that such theorizations can be useful if they are combined with a strong focus on exploitation and class. My concern is that many of these theorists forget that capitalism is primarily a system of exploitation that needs to be questioned as totality and that such moves result in reformism, optimistic ideologies, etc. So you could also say that the theory of surplus value is not only the theory of exploitation, but is at the same time the theory of political revolution.

> I should stress that the critique in my previous post is not
> specifically directed at Christian Fuchs (whose knowledge of the Marxist
> tradition I quite admire) nor is it a rejection of Marx himself (still the most important philosopher of > social existence in my view). But I do think there is a lot of time wasted trying to apply Marx's ideas
> verbatim to vastly changed situations.

There certainly must be reasons for why you are not interested in Marx today, and that should be respected, but I doubt that Marx's ideas are so old-fashioned that they can no longer be renewed today, are only applicable to 19th century, etc. These are mainly biases that in many cases have political reasons, not intellectual or theoretical reasons.

I agree with you that Marx did not theorize the welfare state, but this is due to the fact that he died before he could write a book about state theory.

> obviously did not foresee the emergence of a kind of
> finance that would prey upon the vast amounts of capital won by working
> class agency. Yet this is what has happened in our time: under the logic
> of neoliberalism, much of what used to be welfare state entitlements has
> been transformed into fungible private assets (health insurance
> policies, 401k accounts, private suburban homes, etc) and delivered over
> to the nominal control of individuals or relatively small and localized
> groups. These individuals and groups then find themselves at the mercy
> of large, sophisticated, rapacious financial operators who offer them
> further market schemes encouraging them to speculate on their tiny stake
> of capital, in order to expropriate some generous percentage of their
> assets as we have just seen done so blatantly in the course of the
> recent housing bubble. I think Marx can be used pretty successfully to
> describe a lot of this, but just repeating his concepts adds nothing:
> you have to get into the materiality of the social relations that have
> emerged since the 1980s. For that there is a really excellent book by
> James K. Galbraith, who interestingly enough is the son of the great
> theorist of the welfare-warfare state, John Kenneth Galbraith. I really
> recommend this short and well-written book to everyone: it is called
> "The Predator State."
Marx of course did not describe the current financial and economic crisis, but there are elements in his thought that can be used. The notion of "fictitious capital" for example. The insight that financial capital is based on an accumulation cycle in the form of G-G', etc. I agree that neoliberalism is an important context variable of the finance crisis. There is for example something in Marx for explaining financial bubbles: “the rise or fall in value of" financial capital "is independent of the movement in the value of the real capital that [it[ represent[s]“. Neoliberalism drove down variable capital costs (wages) in order to increase profits. This class struggle from above reduced the consumption capability of the working class and required many workers to take out mortgages in order to buy houses, which was one factor of the finance crisis. Marx said in this context: “ultimate reason for all real crises always remains the poverty and restricted consumption of the masses, in the face of the drive of capitalist production to develop the productive forces as if only the absolute consumption capacity of society set a limit to them”.

I do not think that it makes much sense to believe in crisis explanations by people such as Krugman or Stieglitz who in the end want to tell us that we can observe that neoliberalism did not work and that a new Keynesian politics is needed and that crisis is not inherent in capitalism, but the result of the greed of a few immoral capitalists. Saying that Marx had nothing to say about finance capital sometimes serves the purpose of celebrating Keynesianism. But Fordist, welfare state, regulated capitalism also ended in a large crisis, it had its own contradictions, many people suffered from the 2nd world economic crisis, etc. Also Keynesianism and neo-Keynesianism as policy strategies cannot rid capitalism of its immanent contradictions that destroy lives and create misery, especially in times of crises. My observation is that the Marxist explanations of the current crisis that are available are much more convincing than the bourgeois explanations. The new world economic crisis could be a foundation for dealing with Marxist and Marxian crisis theory in a new form and for renewing and further developing these theories.

> The point remains that treating Facebook users as the
> nineteenth-century working class is not only absurd; it also distracts
> from the enormous changes that are going on before our eyes.
I read this statement as meaning that exploitation and class are not important categories in an information economy. As already mentioned, I disagree with this argument.

> simple face-off between bourgeoisie and
> proletariat that Marx predicted.
Marx, as I read him, did not assume that class war is the automatic result of capitalist development. There is a strong element of political praxis in Marx's writings, which means that the breakdown of capitalism will only happen as a result of mass proletarian action, the "self-activity", as Marx says, of the proletariat. But if this is a self-activity, then it is not externally determined by capitalist development. It can happen, but this is no necessity.

Michael Bauwens wrote:
> I think we do have to accept that we are  no longer in a mercantile, nor
> industrial capitalist logic, but in a third phase of cognitive capitalism.
I do not think it is "cognitive capitalism", "communicative capitalism", etc, but "new imperialistic capitalism". I would use the term "information capitalism" only for that part of new imperialism that is based on information, which is important, but not dominant. These are important questions that can only be answered by empirical studies. I have engaged in this work in the past year and some publications on these issues will be forthcoming. If someone says we live in a "cognitive capitalism", then evidence is needed that cognition is the dominant phenomenon.

> But what if we observe that, not socialism is occuring, but a new
> hyperproductive system, in which both the capital and managerial class, and the
> producing class, see different advantages to move towards. A section of capital
> becomes netarchical, and starts monetizing these practices. It appears at first
> hand to create a new economic sector, but it is embraced also by the producing
> classes, for different reasons.
> The point is, while it originally appears to strengthen the
> capitalist totality, it at the same time creates post-capitalist logics, such
> as the direct production for value, forms of participatory governance that are
> practiced outside corporate formats, and commons oriented property formats.
> Commons-based peer production, the sharing platforms, and crowdsourcing are
> three main forms of this mutual adaptation.
I agree with you that the Internet advances communist potentials, but these are today at the same time subsummed under capital. One and the same technology seems to undercut capitalist interests, but frequently also becomes part of a new business strategy. Take file sharing: It is considered as a threat by the music and film industry, but at the same time there is iTunes or new file sharing business models in the music industry (examples are albums by Radiohead or Nine Inch Nails).

> The paradox is that it both creates new forms of capitalism,
> and new forms of post-capitalism. It is both immanent and transcendent, and we
> have to resist any either/or logic but rather see them both occurring at once.
 I completely agree. This is the thesis that I have advanced in my book "Internet and Society". The problem that I see is that many people overestimate the post-capitalist aspects and forget about the capitalist aspects. The second are a very powerful reality, the first are still more precarious potentials of resistance that are much harder to realize. So this dialectic is an asymmetric one.

> My thesis is that the marxist thesis, of a organized working class taking power
> and then changing society, has been discredited. Not only because it didn't
> happen in the last 200 years, but because it is based on a misreading of
> history
> Capitalism is not dead, but it is dying, and as infinite
> growth is not compatible with a limited natural world, it has to die. Though it
> could conceivably be replaced by something worse, and though it is unlikely
> that 19th century socialist scenarios will come to fruition, the
> phase transition towards a fully commons-orientated mode of peer production, is
> a strong historical opportunity, and we should not idly stand by while it is occurring.
I think capitalism will only "die",   if it is overthrown by an "organized working class". To assume that there will be an automatic breakdown is a form of functionalist structuralism that neglects the role of agency. In this situation, an organized working class that includes all exploited classes (including prosumers) is needed more than ever.

Michael Bauwens wrote:
> It seems to me that the logic of Christian's arguments ends up laying the blame totally at the supposed >victim,  i.e. the working volunteers ...
>The industrial worker could be excused for being exploited, indeed because of the enclosures, the >alternative to working for pay is usually starvation ...
>but the facebook volunteer, extremely exploited because he works totally for free, has no such excuse, >he is totally and entirely responsible for his own exploitation, the more so that usually open and free >alternatives exist ...
>so I say we launch a new political movement to fight against these people, because they are much worse >than their exploiters,
I do not understand the logic of this argument. The central aspect and scandal is that capital exploits wage labour and other workers and that therefore a movement against capital is needed. Facebook produsage exploitation is not "voluntary", there are no viable non-commercial non-profit alternatives to it, users therefore are forced to use it, otherwise they would hae less fun and less satisfaction and less social relations and therefore more problems, etc. And even if some consumption is voluntary because there are different products you can consume, even non-commercial ones, or if some labour is voluntary, then the scandal is not that someones lets someone else exploit him/her, the scandal is that in capitalism there are groups and individuals that pursue (and have to pursue) the interest of exploitation in order to accumulate profit.

Michael H. Goldhaber wrote:

> To begin I must say that as a grandchild and relative of Holocaust victims I find your implied >comparison of Facebook and Auschwitz to be beyond distasteful. That it would occur to >you to make such >an extreme and odious comparison suggests the underlying weakness of your argument.
I did not compare Facebook to Auschwitz, I said that the notion of "unproductive labour" is problematic because it is a logical foundation for elements of politics of annihiliation. I was not talking about technology, social networking sites, etc in that passage. I just wanted to stress that in history terroristic ideologies made use of one-dimensional notions of "unproductive labour" and "unproductive capital". There was no reference to Facebook or technology in that passage.

> Let me say a little first about  Marx's labor theory of value. He was clearly referring to labor in >making commodities in the industrial age, where by "commodities" was understood >objects that were >interchangeable and effectively identical with others of the same sort made in other factories or >factory-like settings, under the control of other capitalists. Only in such >circumstances does the >phrase "socially necessary labor time" have meaning. Here I take "socially necessary" to refer to (a) the >level of skills  reached by a sufficiently large pool of >workers at the moment and (b) the technical >capacities of available factory machinery, also at the moment.
I do not know how you have arrived at such a definition of socially necessary labour time. MAybe you did not want to give a definition, but rather you wanted to talk about influencing factors. Socially necessary labour time obviously must be measurable in working hours, "level of skills" (high skills, low skills, etc) is not socially necessary labour time itself, technical capabilities (high productivity, low productivity, etc) are also not. These are factors that influence socially necessary labour time, i.e. the time that  workers need to engage in labour in order to produce the basic necessary means of subsistence of sociey. If skills and productivity are higher, then necessary labour time will be lower.

> Most astute capitalists today recognize that to produce pure commodities is a bum's game, for in that >case there is competition, which in the (now relatively short) long run drives >average profits to zero. >Thus they seek to resort to the police powers of the state to give them monopolies in the form of >intellectual property: patents, trademarks, design patents, trade >secrets, and copyright. As we know, >the increasing proportion of products that may be digitized (music, movies, photos, book texts, >journalism, and computer software of all sorts, for a >start )  would tend to zero value whenever they >are not protected in such fashion, since copying takes virtually no labor time. (This is also true for , >e.g., genetically modified crops and >other biological products. ) A majority of profits today come from >such products. Unless one chooses to extend the meaning of "socially necessary" in ways probably never >intended by >Marx to encompass such conditions, the labor theory of value is mostly inapplicable now.
I think you misinterpret Marx. It was one central element of Marx's labour theory of value that he said that with increasing productivity the value of commodities decreases. As long as there is capitalism, commodities will have value and surplus value. The value contained in the production of a digital music or a commercial software  is large for the first piece, and small for all copies (only the labour for reproduction). This changes the labour theory of value, but does not eliminate it. I have written about this several years ago in a paper with the title "Software Engineering and the Production of Surplus Value": http://clogic.eserver.org/2002/fuchs.html. Those who are interested of how to apply the labour theory of value to digital products, find some arguments there. The value needed for producing the first piece of a digital commodity is crucial. One could also base the idea of a social wage for all cultural producers on it.

"A majority of profits today come from such products" is a false claim. If you take a look at value creation statistics, then you will see that the relative majority of value is not produced in the "new economy", but in traditional industries. I would be more interested in discussing such issues based on concrete data, otherwise it makes no sense.

Marx's labour theory of value in my opinion wants to tell us that the reduction of necessary labour time due to productivity gains is embedded into the antagonism between the productive forces and the relations of production and that value and capital therefore is, as Marx says, "the moving contradiction, in that it presses to reduce labour time to a minimum, while it posits labour time, on the other side, as sole measure and source of wealth". This means that on the one hand the technical preconditions for communism exist, on the other hand social problems are intensified by the contradictory character of value. The labour theory of value is not only about measuring labour values, it is also a theory of capitalist crisis.

> Now the people who attend Springsteen concerts not only must pay a lot for tickets, but have to wait in >line both for the tickets, and to attend the concert, as well as having to sit >through the concert. By >your logic, Christian, they would be performing unpaid labor, much as Facebook users supposedly are. >Further, by having these large audiences, Springsteen >assures himself of even more attention, and >obtains new audiences. Even if he were to give away his recordings for free over the Internet he would be >obtaining unpaid labor from all >who listen, which would enrich him further.
Facebook is different from a Bruce Springsteen concert. In the case of Facebook, the audience is sold to advertisers, the more users there are, the higher the advertising rate and the more profit.The direct comparison are advertisements on TV, radio, newspapers, etc, not CDs or concerts that are based not so much on advertising profits, but on profits achieved by selling a CD or concert to music fans. So I think these are two different situations that must be distinguished, so I do not think that fans listening to a Bruce Springsteen concert are producing surplus value. But it is important to point out that there are different cultural products that realize profit in different ways, so it is a good point that you are making.

> The only problem is that by your math, Springsteen, just like Facebook, would be extracting infinite >surplus value, even if that value were not realized by him or by anyone. I think that >is just a >ridiculous and confusing way to  understand what is going on, either in the case of Facebook or in the >case of any net attention -getting person, i.e. a star.
As just mentioned, I think Springsteen has a different accumulation model than Facebook. Springsteen sells music CDs, concerts to fans, Facebook sells users to advertising clients. No direct comparison of these two examples is possible, exploitation works differently in each case.

> Let me now suggest a different way of  accounting for what takes place when one "uses" Facebook. (Then I >shall address the rather different question of how Facebook makes or >hopes to make money.) Simply put, >Facebook is a means for  paying and receiving attention and for showing off the size of one's audience or >possible audience. (By what I call the >"audience effect" the larger one's audience, the more likely one >is to attract attention from someone new.) It is possible to set up a fan page and acquire up to >thousands or even millions >of fans. Thus,  Facebook is an avenue for the extension of the attention >economy, in which for the most part, no money actually changes hands.
Money changes hands between advertising clients and the Facebook company. This is for me the crucial aspect of this business model.

Best, Christian

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