[iDC] Social Production and the Labor Theory of Value

Michael H Goldhaber michael at goldhaber.org
Thu Oct 29 21:37:53 UTC 2009

Christian, and everyone.

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.

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.

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.

But what if one does so extend the term? What them must be meant by  
socially necessary? For an illuminating case, consider works of art by  
well-known artists. The labor time to produce say a copy of Mondrian's  
"Broadway Boogie-woogie" that would look authentic to the average  
person interested in art would be very little, but to actually be  
sellable as if it were the original would mean that "socially  
necessary" would have to include fooling the art establishment, a  
nearly impossible task in the case of such a well-known painting. Even  
to produce, say, a supposedly newly discovered Pollock would entail  
great difficulty, including supplying the work with a believable  
provenance, as well as making  the dripping method used lead to just  
the sort of droplets and curves and paint thicknesses to be found by  
an expert to be Pollock-like. If you think this is how the theory of  
value would work in such a case, those complexities  would explain why  
such art works sell for such high prices (and presumably have high  

There is another way to think about the high value that seems to  
adhere to certain works of art. It is because they, and usually the  
artist as well, have gotten lots of attention. Should they lose that  
attention over the course of time, the value would disappear. Only by  
a great stretch does such value have to do with the labor theory.  
Consider instead another kind of artist, say Bruce Springsteen.  
Tickets to good seats at his concerts can sell for hundreds or even  
thousands of dollars. A Springsteen impersonator might stage a concert  
that would fool some people by lip synching to the recordings of the  
But what concert goer would knowingly and willingly pay the same high  
prices to hear an unknown imitator lip synching?

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.

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.

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.

Now Facebook could have been begun as an open-source site created by  
volunteers, or perhaps for the glory of it. But in actual fact it was  
not. Instead, the founder sought venture capital to pay for the  
servers, etc., and to satisfy the investors presumably had to come up  
with a suitable "business model." That model, as is usually the case  
these days with new Internet sites, eventually comes down to seeking  
advertising money.  That is done not by selling an audience but by  
selling  the chance to seek the attention of members of the audience,  
in order to attempt to convince them to buy. When advertising is  
successful, the cost of the advertising is included in the price, so  
that Facebook participants who succumb to the wiles of advertisers in  
fact pay the costs of the site (if Facebook makes money) except that  
sometimes advertising is unsuccessful, in which case the unsuccessful  
advertisers or their investors pay for the part of the costs of the  
site. The participants who do not succumb to the advertisers are  
simply getting a free service.

Obviously, if the Internet keeps expanding with new kinds of  
offerings, taking up more and more of the world's attention,  
eventually advertising will not do the trick of supporting it. Then  
either sites will have to ask for money directly, as some (say  
Wikipedia)  now do, or adopt the cooperative model Michel Bauwens  
suggests or ask for volunteers (aka fans) to keep them going. I agree  
with Michel that either of these latter would be clearly  post- 


On Oct 26, 2009, at 6:59 AM, Christian Fuchs wrote:

> Thank you for brining up the issue of the labour theory of value,  
> Adam,
> and thanks to Mark for following up on this issue. I think this  
> topic is
> important for the discussions about digital labour, but of course it  
> is
> a difficult issue, which in my opinion requires to discuss what Marx
> actually wrote about value, surplus value, class, exploitation, etc. I
> agree with most of Mark's reply on this issue and I disagree with much
> of what Adam has written in his posting.
> Let me add my own views.
> The exchange value of a commodity is the quantitative relationship in
> which it is exchanged with other commodities: x commodity A = y
> commodity B, further developed by marx in capital, vol. 1, in the
> wertformanalyse (analysis of value form). Exchange value is not the  
> same
> as value. In exchange, the values of two commodities are equivalized,
> but the value of each single commodity is determined in the labour
> process. Labour is the substance of value.
> Therefore for such a discussion, we need to start with the question.
> What is the law of value? So let's go to Marx, Capital, Volume 1:
> Marx says that when speaking of the value of a commodity, labour  
> "counts
> only quantitatively", it is a matter of "the 'how much', of the  
> temporal
> duration of labour". "the maginitude of the value of a commodity
> represents nothing but the quantity of labour embodied in it"
> "A use-value, or useful article, therefore, has value only because
> abstract human labour is objectified (vergegenständlicht) or
> materialized in it. How, then, is the magnitude of this value to be
> measured? By means of the quantity of the 'value-forming substance',  
> the
> labour, contained in the article. This quantity is measured by its
> duration, and the labour-time is itself measured on the particular  
> scale
> of hours, days etc".
> "In general, the greater the productivity of labour, the less the
> labour-time required to produce an article, the less the mass of  
> labour
> crystallized in that article, and the less its value. Inversely, the
> less the productivity of labour, the greater the labour-time necessary
> to produce an article, the greater its value".
> Can the law of value be applied to Facebook? Yes:
> The capitalist exchanges access to user data and to his Internet
> platform with money in the form x commodity A = y commodity B. The  
> value
> of the Internet platform as commodity is determined by the amount of
> labour objectified in it that is created by the substance of value -
> labour, i.e. by the users. The more Facebook users there are, the more
> playlabour time is objectified in the Facebook platform, the higher  
> the
> value of Facebook, the higher advertising rates (at the price level)  
> can
> be set, the more profit can be made.
> When we talk about labour value, we always talk about labour time,  
> which
> is different from the price level, which we can observe and calculate
> because existing economic statistics are not based on labour values,  
> but
> on prices. It is generally speaking not possible to calculate prices
> directly from labour values, there is not a simple mystical formula  
> for
> solving the transformation problem because this is a much more complex
> problem. But there is a causal relationship between values and prices:
> Marx: "When the labour-time required for their production falls,  
> proces
> fall; and where it rises, prices rise, as long as other circumstances
> remain equal".
> Marx's category of the rate of surplus value or rate of exploitation
> measures the relationship of surplus labour to necessary labour, e =  
> s /
> v. At the value level, this means the relation of the hours a labourer
> produces surplus value to the number of hours s/he works to reproduce
> his/her wage. At the price level, this is the relation of profit to  
> wages.
> In the case of Facebook produsers: e = s /v, v => 0, s=>total number  
> of
> working hours, therefore: e => infinity. Which means: The rate of
> exploitation of Internet produsers converges towards infinity, they  
> are
> enormously exploited because no wages are paid to them. By outsourcing
> production from wage labour to unpaid labour, web 2.0 capitalists can
> accumulate ever more capital. The value produced (i.e. the objectified
> labour time) by  Internet produsers is divided in such a relation   
> that
> all of their labour time is surplus labour time.
> It is a wage labour fetishism to say that only labour that receives a
> wage can be exploited, produces value, etc. This would mean that a  
> slave
> is not exploited. But if the slave is not exploited, why would one  
> want
> to start a revolution in order to break the chains of slavery? Wage
> labour fetishism not only affirms slavery, it also establish a  
> dangerous
> dualism that considers all those who do not work for a wage (the
> unemployed, etc) as parasites. This terroristic labour ethic is  
> typical
> for contemporary capitalism, but was also an element of Nazism and
> Stalinism. A fetisthistic labour theory of value is one that does not
> see human activity as the source of value, but wage labour.
> At the gates of hell of most of the Nazi death camps, there were signs
> saying: "Arbeit macht frei" (Labour makes you free, see for example  
> the
> gate to the extermination camp Auschwitz here:
> http://www.bufata-chemie.de/reader/ig_farben/pics/4-2-2_01_tor_auschwitz.jpg
> ). All those, whom the Nazis considered as "unproductive labourers" or
> as "unproductive capitalists", were either vaporized or killed by the
> hardest compulsory labour (that benefited the  German war machine and
> certain German industrialists).  Saying that labour only creates value
> if it is commodified, brings us dangerously close  to arguing that
> non-wage labour is unproductive, which always is the first logical  
> step
> for the concept or praxis of the annihilation of so-called  
> "unproductive
> labour" that is seen as parasitic and can easily be connted as Jewish,
> foreign, black, unemployed, homeless, etc.
> Adam referred to the "Maschinenfragment" in the "Grundrisse",
> specifically to the passage, where Marx says that the emergence of
> General Intellect anticipates a communist society, in which "the  
> measure
> of wealth is then not any longer, in any way, labour time, but rather
> disposable time". Communism is for Marx a highly productive, automated
> society, in which goods are produced automatically without any or  
> hardly
> any human labour/work necessary. As a result, all time becomes
> disposable time and humans  can for the first time be real humans
> because they are emancipated from  hard work.  General Intellect
> becomes an immediate force of production when there is a very high
> degree of productivity, because the technologization of production
> increases the informatization of production. Marx says that if this
> situation is given within capitalist relations of production, then the
> law of value does not vanish within capitalism (it only vanishes in a
> fully automated communist society), but a contradiction in the  
> character
> of value production emerges/is intesified that Marx also formulated in
> the Maschinenfragment: "Capital itself is 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".
> Contemporary technology anticipates communism, but is embedded into
> capitalist relations of production, where labor time is the source of
> wealth and the law of value applies, so that the contradiction between
> the productive forces and the relations of production is intensified.
> Concerning the productive forces, we are objectively close to  
> communism,
> but concerning the relations of production, this results within
> contemporary capitalism in an expansion and intensification of
> exploitation, i.e. a situation of convergence towards infinite
> exploitation, in which no wages are paid, but there is maximum
> exploitation.
> Negri and other Autonomist Marxists have in my opinion incorrectly
> interpreted the Maschinenfragment by assuming that the situation,  
> where
> disposable time is the source of wealth, exists in contemporary
> informational capitalism. They observe the existence of General
> Intellect and assume that this means the end of labour time as the
> source of wealth. But Marx refers to communism in the specific  
> passage.
> The contemporary situation is described by the contradiction between
> labour time and disposable time that Marx mentions and that I just
> cited. Disposable time only becomes the governing principle of the
> economy in a true communist society, not in capitalism.
> Toni Negri wrote in "Marx beyond Marx" that Marx's "Capital" is much
> inferior to the "Grundrisse", which implies one should stop reading
> Capital and instead focus on the Grundrisse. But the Grundrisse is in
> many respects only a fragment that contains interesting passages, but
> there are reasons why Marx published Capital, Vol. 1, as his main  
> work,
> and saw the Grundrisse only as a preliminary study. I think it is a
> problem that there is a tendency in Autonomist Marxism to ignore or  
> not
> to read Capital.
> Cheers, Christian
> -- 
> - - -
> Priv.-Doz. Dr. Christian Fuchs
> Associate Professor
> Unified Theory of Information Research Group
> ICT&S Center
> University of Salzburg
> Sigmund Haffner Gasse 18
> 5020 Salzburg
> Austria
> christian.fuchs at sbg.ac.at
> Phone +43 662 8044 4823
> Personal Website: http://fuchs.uti.at
> Research Group: http;//www.uti.at
> Editor of tripleC - Cognition, Communication, Co-Operation | Open  
> Access
> Journal for a Global Sustainable Information Society
> http://www.triple-c.at
> Fuchs, Christian. 2008. Internet and Society: Social Theory in the
> Information Age. New York: Routledge. http://fuchs.uti.at/?page_id=40
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