Understanding Modernity by Münch Richard

Author:Münch, Richard
Language: eng
Format: epub
Publisher: Taylor & Francis (CAM)
Published: 2010-10-14T16:00:00+00:00

5.2.2 ‘Occidental rationalism’ as a perspective on modern society: Wealth creation and the determination of the price of labor in the field of tension between the economic, political, cultural and communal spheres

As is already the case when the law of value is used to explain general alienation in commodity production, the application of the labor theory of value in explaining the alienation of waged labor gives rise to misinterpretations of the basic structural problems in modern societies which are independent of the mode of production. The first weakness to become clear has to do with the application of the labor theory of value to labor itself, for in principle any level of wages can be made to agree with the theory, making it unsuitable for explaining either the tendency toward pauperization or the placing of an upper limit on wage levels by the need to maintain at least a minimal amount of capital self-expansion. The essence of this weakness is that Marx treats the quantity and quality of goods and services thought in a particular society to be necessary for maintaining the capacity to work as a matter depending on the culturally defined level of needs and hence having no immanent limit to it.41 It is only the principle of competition which actually sets those limits in that any owner of capital whose cost of reproducing labor power—i.e. wage costs—are so high as to produce losses and prevent further capital expansion will be eliminated from the market. This, however, means that one must have recourse to a subjective theory of value, in conjunction with the conditions governing the effects the complex network of expectations within market association can have under free competition, if one wants to explain Marx’s assumed law that the price of labor power may never reach a level at which capital expansion is no longer possible—i.e. which would allow no profitability. Here again the labor theory of value proves inadequate for the explanation Marx is aiming at.42 Accordingly, Marx repeatedly deviated from the labor theory of value to resort to a supply-and-demand theorem.43

The labor theory of value is also misleading as an explanation for the creation of value. Value creation, by which one should understand the availability of more goods and services in a society at a point in time t2 than were available at an earlier point t1, is not simply dependent on the labor input at t1; rather, the essential point is that at t 1 more goods and services were being produced than were being consumed. The greater the amounts being saved and converted into investment in capital goods at t1, the higher the rate of value creation in the period to t2. The level of wages within an enterprise not fully matching the sale proceeds of the commodities produced is a necessary precondition for the creation of value, but it is not the only one. The rate of value creation, whether in single enterprises or in the economy as a whole, is reduced by production costs of any kind, and conversely raised by any cost savings.

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