[iDC] Social Production and the Labor Theory of Value (2)

Brian Holmes brian.holmes at aliceadsl.fr
Fri Oct 30 20:39:54 UTC 2009

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.

It's a matter of layers, and there is always a next layer. Thus, the 
ontological status of human labor as the source and measure of value in 
capitalist societies continues to justify the hyper-exploitation of 
factory workers and sweatshop laborers all over the planet, and 
therefore, to govern important aspects of the economic relations between 
classes, as well as the geo-economic relations between core and 
peripheral states. But at the same time, at least two further types of 
social relations that Marx did not directly observe are layered onto 
that. The first layer came in the 1930s and reached maturity in the 
1950s: it is the welfare state, which created large tracts of socialized 
capital (public facilities of all kinds, redistribution mechanisms for 
retirement, health care, education etc). This has been described 
extensively by David Harvey as the "secondary circuit of capital" and it 
has made a huge change in the way capitalism works within the core 
states where it was applied, creating a new mediator class between 
bourgeoisie and proletariat which is commonly and perhaps rightfully 
described as the "middle class." One important consequence of this for 
Marxist thought was the realization that the "socially necessary labor 
time" required for the reproduction of the labor force was itself a 
function of the standards that apply in any given society at any given 
time, a fact to which Marx does allude at one point, but whose full 
implications only became visible with the rise of the welfare state. 
Today, some theorists including Harvey speak not of the labor theory of 
value but rather of the "value theory of labor," stressing that it is 
the agency of the working classes, gained through conflict and struggle, 
that determines what the standard wage and the minimum acceptable 
standard of living will be. For this, see an excellent short piece by 
Bob Jessop:


So that's one important layer, and Marx did not theorize it because he 
did not live to the 1930s. Another important layer is added from the 
1980s onward, and that is neoliberal finance. Of course, Marx has lots 
of things to say about finance capital; but as he did not foresee the 
vast expansion of the secondary circuit and therefore, the partial 
socialization of the capitalist state, nor perforce the rise of the 
"middle classes" as the mediators between what he thought was the 
essential and inevitable conflict between the proletariat and the 
bourgeoisie, he 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."

OK, all that takes us far from the Internet and it's another long, 
soaring post which any uninterested person has already, I trust, stopped 
reading. 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. Adam 
Arvidsson says we are moving into an "ethical economy" and he expects 
that the reputation-ranking functions of social media will create a new 
breed of what you might call "clean and serene" corporations, to replace 
the old "lean and mean" ones. I would submit instead that while 
intellectuals waste their time pandering to people who are fascinated by 
the tawdry narcissism of networked environments organized to promote the 
delusion of transparency and community, the major predators are 
organizing the last great suicidal development of the capitalist 
economy, in which a newly concentrated and now truly global banking 
sector will systematize and intensify the chaotic trends of the three 
preceding decades, in order to promote and realize an extreme version of 
neoliberal development unencumbered by any organized resistance 
whatsoever. This new social order will continue to depend on large 
consumer and prosumer classes to manage surplus and to waste lots of it, 
while laying waste to the environment at the same time; so I am afraid 
you will still not have the simple face-off between bourgeoisie and 
proletariat that Marx predicted. But the new social order, if it is left 
to establish itself without resistance as is presently being done, will 
also require all the trappings of an extreme security state, in order to 
ward off the attacks of great percentages of the population thrown into 
poverty even in the core states, and also great numbers of people, 
initially in the underdeveloped world, whose cities will be underwater 
and who will be migrating towards the golden towers. Under these 
conditions, those who labor, and do not speculate on their assets or 
human capital as most middle-class Internet users do -- nor much less 
have access to venture capital, as was just described in the interesting 
post by Christopher Kelty -- will see their capacities for resistance 
and agency reduced to nil, and both the "labor theory of value" and the 
"value theory of labor" will finally be obsolete. What's left in the 
absence of organized resistance is just one thing: capital as power, the 
power to create social relations and impose an order upon them. This is 
subject of Shimshon Bichler and Jonathan Nitzan's new book, Capital as 
Power: A Study of Order and Creorder, which among many other things 
contains a specific refutation of the labor theory of value.

I actually don't think we are there yet -- that is, I think there is 
still some organized resistance left in the world, from the working 
classes, from peasant classes unwilling to be entirely expropriated of 
their traditional relations to the land, and also among middle classes 
who know how to protect and develop their relative political autonomy 
won over the course of centuries -- but nonetheless, I do highly 
recommend reading Bichler and Nitzan if you want to understand how 
corporate power is expressing itself right now, and how far we are from 
the social-democratic pipe dream of an "ethical economy." The first 
chapter of their book can be downloaded from their archive, as can an 
earlier essay including similar references to the subject of our 
conversation here, the famous labor theory of value:



For the next layer of capitalist power to be fully installed -- and for 
the economy to "recover" from its present state of uncertainty and flux 
-- I think the developed societies need a perfected system of 
second-order cybernetic control over the consciousness of their middle 
classes, exactly the kind of world-creating and attention-channeling 
system that is discussed by Greg Elmer and his co-authors in their 
excellent article. The initial basis of this system is contemporary 
social media in its dominant corporate 2.0 forms. It really has to be 
explored a little more seriously, within the existing social relations 
and not in terms borrowed from the past. But that kind of exploration 
remains very rare, leaving media theory in a realm of fantasy. So in my 
opinion, friends, we can talk all we want about the marvelous freedoms 
of playlabor, or on the contrary, about the horrifying expropriation of 
our proletarian toil by Facebook or Orkut: so doing, we'll be shooting 
the breeze, no autonomy will be won and the processes underway will run 
their course.

Here's hoping for a better future,


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