Sunday, October 19, 2008

Obama's Labour Theory of Value

In St. Louis, Barack Obama raised a good question: "Do we simply value wealth, or do we value the work that creates it?" Once again, we can take this out of context and agree with his critics. Maybe he really is a socialist! (Why that's a plainly bad thing we don't really understand here in Europe.)

But I've noticed something else, which goes deeper. I get the sense that Obama is really trying to foster conditions that will allow the individual American to work his or her way out of the crisis. That's real hope. And it's fundamentally American (as I understand it). The stimulus package that is being discussed is designed, I think, to ensure that there is work (the source of value) for as many people as possible and that this work ensures the circulation of sufficient cash, even if this will have to go mainly to bare necessities. Families will have to make do with less, but not so much less that a bit of hard work for a couple of years won't get them through.

Under McCain, I fear, Americans will get the sense that they will have to wait for initiatives stimulated at the top (even on Wall Street itself) to trickle down to them. Under Obama, they'll tighten their belts, roll up their sleeves, and get to work.


Kirby Olson said...

Labor as we spell it in the US of A, cannot be what underwrites value. In Port Angeles, Washington (about an hour and a half west of Seattle in Washington State, with a good ferry across the Sound to Victoria) there was once a Proudhonian anarchist community that subsisted on time banks.

A time bank allowed you to bring in a product of some kind and exchange it for a product that had taken an equal amount of labor to produce.

Many of the anarchists in the compound were artists: poets and musicians. A poet would bring in a sonnet that had taken him a year to produce. First, none of these poets were famous, and none of their poems were very good. But they had labored quite hard on their poem, and they wanted an equal share of potatoes. So they took home a truck load of potatoes in exchange for their lousy poem that they had worked on for a year.

In about two years' time the community reverted to laissez-faire capitalism.

Because it works.

The price that the market sets for a poem, or for any other good, is what it's worth. This is better than the state determining what something is worse, because it is likelier to be closer to the actual value that a community considers something to be worth.

Of course some poets will be artificially raised in value by being tight with a claque who applauds their every creation (LANGUAGE), but outside of that clique, few relish the works of said poets, and we might say that it's actually brought down the value of poetry itself.

The artificial notions that we should raise the value of a given race, or gender, or class, just because the state says that we should, is similar. It's better to let the market itself set the value, because in the long run, this is the only trustworthy and reliable measure of value.

If it weren't for America, Europe would have been socialized on a national basis 50 years ago, and would still be goosestepping, and wearing funny moustaches, and many of its most valuable citizens would be dead.

You have to watch out when any one group seizes the political strings, and decides value.

Some claim that that has already happened. I would argue that it hasn't, but that it's about to. Obama's value is itself grossly overstated: his value in terms of what he's actually accomplished is very small. People say potential in him, but his true potential is in causing the economy to go haywire by artificially "changing" the nature of what and who is valued, by ramming through reparations, and changing tax structures, redistributing wealth, and so on.

I know tha tmany people believe this must be done. But it will just end up in an imploded economy along the lines of Port Angeles.

God forbid.

Kirby Olson said...

Fox News has had many specials arguing that the group ACORN (with whom Obama has worked as a lawyer) is what has killed the economy in the Freddie Mac and Fannie Mae plunge. Aggressively arguing that the state had demanded high risk loans to potentially deadbeat groups like themselves undermined the true value of the stocks, and when this was discovered, and the high risk lendees defaulted, it caused a virtual implosion in the economy which was felt around the world.

I expect Obama to increase such laws against the common sense, and to thus completely destroy the economy if he is elected.

We should let the markets set the notion of value, rather than letting politicians set value according to their whims.

By some miracle, McCain may still win.

I realize that Fox News has a certain agenda in terms of holding to a Smithian notion of the economy, which isn't shared by many of the other networks who have caved into the socialist way of thought.

I do feel that there ought to be some limit on what people are allowed to acquire. Luther argued that it was wrong for any leader to make more than ten times what the lowest person in their institution was making.

I would agree with that.

It's hard to understand how some of the corporate CEO's are able to get bailouts to the tune of a 100 million. It's just warped. It's the middle that suffers when no one reads Luther.

Thomas Basbøll said...

Well, you'd need some other measure of work. Time has the problems you note. "Time spent under the command of another" would be better. But it would quickly lead to groups forming around the privilege of working for particular commanders.

I think the point is theoretical: value, when it is created, is created by work. It takes work to make a good poem. The value of a bag of potatoes cannot be compared to the value of a poem.

Most of the potato is produced by nature (not the farmer). Most of the poem is produced by culture (not the poet).

But labour is an important factor: it "leverages" (to try to reclaim that word for something honourable) the value that utimately flows from natural and cultural sources. It focuses its effect in a particular place.

What Obama is saying is that we convert what we find around us into something of value. It is that conversion, not the wealth (of nations) it amounts to, that we should reward.

Thomas Basbøll said...

Also I like the income cap you and Luther are proposing. It would need to be applied to societies, however; otherwise you just encourage various rackets.

Kirby Olson said...

I just spent an hour working out a new blog post based on my comments here, and your follow-ups. Thanks for the inspiration.