Value Theory and Labour Process Theory

Transcription

1 Value Theory and Labour Process Theory Simon Mohun (Queen Mary, University of London) 1 The imortance of Braverman It is now some 30 years since the ublication of Braverman s seminal study of the labour rocess. He interreted the various agents in the firm as the bearers of economic relations, and so considered such agents as class members, where class was interreted in the restrictive sense of class-in-itself (thereby excluding consideration of the more ideological class-for-itself). The interaction of these agents was structured around the roduction of a surlus through the introduction of labour-saving and means-of-roduction-using changes of technique. Hence the relations that he highlighted were systemic, and were realised in the reduction of the active agent of roduction (the labour inut) to an aendage of the non-animate means of roduction (the nonlabour inuts, in articular machinery). As execution was searated from concetion, so that knowledge was increasingly monoolised in suervisory activities, and a arallel division of labour subsequently alied to those suervisory activities themselves. Hence desite the many vivid descritions in Braverman s work, he did not roceed by cumulating emirical descritions of labour rocesses in a variety of situations, and looking for atterns. Rather he interreted the dynamic of labour rocesses in terms of an underlying theoretical ersective, that is, in terms of a theory of value. The necessity of a theory of value Firms urchase inuts for sums of money, transform them into oututs in roduction rocesses, and sell these oututs. This is a very general descrition, embracing the roduction of both material goods and services. The first issue is why firms do this at all. One broad answer is that the historical develoment of secialisation and the division of labour destroyed the customary basis of an economy of self-sufficient roducers, so that the acquisition of (initially essential and later less essential) consumer goods required articiation in markets. This historical develoment roceeded alongside the develoment of rivate roerty, so that the suly of oututs by firms was determined by whether it was rofitable to roduce them. Of course, a necessary condition of rofitability was whether the oututs were urchased, and an advertising industry grew u devoted to the maniulation of references under the guise of the dissemination of information. But from 1

2 the ersective of a firm what was imortant was how much money could be made relative to the outlay entailed by roduction. Hence roduction was roduction for rofit. To get any further, a theory of value is required, an abstract account that attemts to establish and describe causal relations between the urchase of inuts, their transformation into oututs and the sale of oututs for rofit. There are two traditions in the literature, stemming from the same historical roots of the works of Adam Smith and David Ricardo: the dominant neoclassical tradition, and the (now dissident) Marxian tradition. The neoclassical tradition The neoclassical tradition intellectually develoed out of a generalisation of the classical (Ricardian) theory of differential rent. Ricardo resumed that equal arcels of land could be ranked in order of natural fertility; given an equalised rate of rofit, land would be cultivated down the rank order to the oint at which returns were zero. All land other than the marginal unit in cultivation would then earn a ositive return that could be attributed to its greater fertility relative to the marginal unit. This focus on the intensive margin encouraged its alication to other inuts, so that by the end of the nineteenth century the theory held that inuts would be hired if at the margin their revenue roduct exceeded their cost, with total emloyment of factors being determined by an equality in this relation. The same sort of marginal relationshi was alied to the ricing of outut, so that outut would be roduced u to the oint at which its marginal revenue (rice) equalled its marginal cost, rice itself being determined by demand and suly in market-clearing environments. Of course, significant assumtions were necessary for these results to hold. In articular, consumers references, firms technologies, and all agents initial endowments were resumed exogenous; reference sets and roduction sets were resumed convex; uncertainty was assumed away; and markets were considered erfect. Under such assumtions, the existence of equilibrium could be roved (although its uniqueness and stability remained roblematic). In the resent context, what was imortant about this construct was the notion that all inuts were roductive/had a roductivity, and hence analytically were treated symmetrically in the theory of value. Difficulties with the neoclassical aroach have often been rehearsed. Its methodological individualism, while reflecting the growing emhasis on the bourgeois individual as feudal collectivities disintegrated, has little to say about social organisation. A focus on how the world 1 s.mohun@qmul.ac.uk School of Business and Management, Queen Mary, University of London, Mile End Road, London E1 4NS, UK 2

3 would have to look if the invisible hand were to work as Smith resumed too easily becomes a focus on an asserted essential social harmony of the ursuit of selfishness and greed. Moreover, the emhasis on equilibrium tends to have a rofoundly static character that sits oddly with the reality of a dynamic caitalism. The agents of the neoclassical aroach, the firm and the household, are generally treated as homogenous units, and so much is assumed exogenous that the aroach has to be entirely ahistorical. Finally, the neoclassical exlanation of rofit is feeble. Pure rofit is a return to a factor of roduction that is at best loosely defined and ultimately reduces to ositive time reference as an innate human characteristic. And excess rofit is a residual attributable to market imerfection. None of this convinces as social theory. For those uncomfortable with the ahistorical rigours of the neoclassical tradition, the work of Braverman was articularly imortant. For it was one way of oening a window to the black box of the firm, and could easily be absorbed into an industrial sociology of management that focused on managerial subjectivity as a driver of intra-firm organisation. In these terms, Braverman was a modern exonent of the tradition that had its origins in the works of Taylor. Control over the division of labour was essential to exloit the economies of scale of large-scale roduction. For some, that is the end of the story. For others, ower relations encouraged a drift into a Foucauldian ersective. Either way, the relation to an underlying theory of value remained oaque. The Marxian tradition The Marxian tradition had urer Ricardian roots in the labour theory of value. This sharly distinguished labour inuts from non-labour inuts, and attributed all new value only to the emloyment of labour inuts. Peole with no resources were forced to sell their caacity to work in order to gain market access to the means of subsistence. The urchaser (someone with resources, or caital, hence caitalist) thereby acquired the use of labour for a secified eriod of time, and within that time could combine that labour with non-labour inuts so that more value was roduced than the caacity to work (labour-ower) cost. Caitalists aid the full value of labour-ower, but its use-value was worth more, and they were able to exloit this difference because of the roerty rights that gave them their initial access to caital. The role of non-labour inuts was to increase the roductivity of labour inuts (in digging, a erson with a sade is more roductive than someone without one); in so doing their value was transferred to the roduct through the activity of the labour inuts. There is imlicit in this account a strong ontology of labour related to the wider ersective of historical materialism: what human beings roduce is determined by their overall environment, but their roduction alters that environment and those alterations in turn alter the roducers 3

4 themselves. Granted the rimacy of animate beings in such transformative activities, nevertheless there aeared a significant difficulty with the labour theory of value. If all new value (wages and rofits) were to be successfully attributed to the activity of the labour inut, then this requires some secification of a causal relation between the labour time exended in roduction on the one hand, and the monetary evaluation of value added on the other. Traditionally, this has been the Achilles heel of the whole framework. In unit terms, the rice of outut is equal to the labour time (suitably adjusted for what is socially necessary ) required to roduce that unit divided by the value of a unit of money. Thus rice is roortional to value. This simle ersective cannot survive the tendential equalisation of the rate of rofit. For if rofits are to be equalised across all activities, then activities with a low (high) ratio of labour to non-labour inuts must sell for a higher (lower) rice than that imlied by a simle roortionality relation. But while Marx s establishment of this roosition entailed a transformation of outut rices, he did not similarly transform inut rices, so that his transformation was incomlete. Worse, it was also inconsistent, because the rofit rate on which caitalists took their ricing decisions was calculated on the basis of untransformed rices, and this was just not the same as the transformed rate of rofit. With the recognition that inter-industry sales and urchases generated very comlicated relations of deendence between inuts and oututs, so that there was no simle relation between the ratio of labour to non-labour inuts on the one hand and rice-value deviations on the other, the labour theory of value was generally considered invalid: there was no obvious causal relation between labour exended and rice. All that was left was the fundamental Marxian theorem, established under fairly general conditions, that the rate of rofit was ositive if and only if the rate of exloitation was ositive. This was a very weak causal relation between labour time and rices; indeed, even its direction was oaque. Moreover, it was vulnerable to the critique that since a full secification of inutoutut conditions and the real wage was necessary to the secification of values, and since that same secification was sufficient to determine rices and the rate of rofit, establishing a relation between value and rices was just unnecessary. Within this tradition, there was a tendency for Braverman s work to become a refuge for those committed to a sociology of class conflict. Braverman s work aeared to validate a sociology of exloitation that retained its validity even if a quantitative labour theory of value did not. Yet without the latter, there was nothing to anchor Braverman s descritions as systemic. If descritions of the labour rocess are divorced from an underlying theory of value, then they lose their context and become secific and contingent. 4

5 The fundamental issue Where then does this leave the analysis of the labour rocess? For the neoclassical tradition, roduction is organised in ursuit of rofit maximisation, and there is little more to be said. Industrial sociology can be used to analyse what this contingently means for articular lants/firms/industries in articular laces at articular times, but such an accumulation of case studies has not thereby yielded any general rinciles. Nor is it ever likely to, given the aucity of the underlying theory of rofit. Indeed, the latter is essentially abandoned in favour of a rincialagent aroach in which individual agents ursue rent-seeking strategies. While the soils may be thus divided, it is not at all clear why there are any soils at all. In this regard at least, the Marxian tradition is more coherent in that there is a very clear theory of the origins of rofit. But Braverman s own ersective was elusive, and only artly because of his association with the 1960s monooly caital ersective of Baran and Sweezy. Over-influenced by the aarent stability of metroolitan caitalism s golden age, Baran and Sweezy had focused on the irrationality of a system dominated by large cororations that had to devote ever-increasing efforts to absorb the surlus they roduced, and on the unroductive activities that were thereby generated. Unroductive was defined relatively, by reference to what was socially necessary (i.e.: would exist in a socialised mode of roduction), and rogress towards the latter was dislaced from the metroolitan working class to the imoverished oulations of the Third World. While Braverman himself refocused attention on metroolitan caitalism, his underlying theory of value remained ambiguous, caught between Baran and Sweezy s surlus on the one hand, and a more orthodox Marxian theory of value on the other. The major roblem however is with the more orthodox Marxian theory of value, because of the 1970s attack on orthodox Marxian value theory (the neo-ricardian critique). Without a clear corresondence between labour value and monetary rice, it is quite unclear how to connect the theory of value with the labour rocess. The issue then is what value theory contributes to the analysis of the individual firm in a way that exlains the organisation of its labour rocess. Values and rices: a recent aroach First introduced in the English language literature by Foley (1982), a recent aroach enables a resolution of these difficulties. This aroach begins with the idea that (over some defined time eriod) there is a total amount of labour activity in an economy that roduces a net roduct. Hence this net roduct reresents the total abstract social labour erformed. Since money is the form of aearance, or social exression of value, a unit of money can be regarded as a claim on total 5

6 social labour. This amounts to secifying an equivalence between the total monetary value of net roduct and the total labour value of net roduct. With this established, then an individual rice can be seen as an exression of a certain amount of value. But, and this is crucial, while an individual commodity is roduced by a certain fraction of society s labour, and its rice reresents a claim to a fraction of total social labour, at the level of the individual commodity there is no necessary relation between these two fractions. Hence the traditional roblem of the relation between the labour value of the individual commodity and its monetary rice is dissolved. The labour theory of value in this interretation is valid for any theory of rice. Some features of this aroach are worth emhasising. First, it begins with aggregate value. This fits much better than traditional interretations with the moral critique of caitalism, and it is worth selling out why this is the case. At the level of the individual contract, there is nothing unjust about ure forms of caitalism. In an ideal world of market exchanges, the seller of every commodity can receive the full value of the commodity sold. The seller of the commodity labourower receives the full value of the commodity she sells; the sellers of the commodities labour roduces receive the full value of the commodity they sell. It is the value difference between these two that is aroriated by the urchaser of labour-ower. That is the urchaser s good fortune. It is also the definition of exloitation. But individual market exchanges are not thereby unjust. The only injustice is the class injustice that arises out of a set of historically determined roerty relations. These ensure first, that the majority have no means of acquiring non-labour inuts and hence have nothing to sell excet their labour-ower, and second, that they have to sell their labour-ower to gain resources to urchase means of subsistence. The history that established this attern of roerty rights is generally not so just, but that was then and this is now. Of course one of the functions of the state is to enforce the maintenance of this attern of roerty rights, and much (conscious and unconscious) effort goes into develoing and maintaining structures of belief that this attern of roerty rights is natural. Thus exloitation, and the ideology and state ower that suort it, all derive from aggregate class relations. They cannot be so understood at the individual level. The second feature to emhasise is that at the individual level the coercive force of caital is economic. It is not transarent, and in this is very different from earlier modes of roduction, such as slavery or feudalism, in which the extraction of a surlus roduct by a non-roducing class from the immediate roducers is non-economic and immediately transarent. Money relations veil class relations in caitalism. Thirdly, because there is no general necessary relation between the fraction of society s labour that roduces a unit of a commodity, and the claim of that commodity when sold to exress through its 6

7 rice a fraction of society s labour, then in general it must be the case that value can aear at locations other than where it is roduced. (Again, this is very different from re-caitalist modes of roduction, in which the surlus roduct has a hysical resence.) This general rationale for unequal exchange oens the ossibility that the roduction of individual commodities might require some labour that does not count as a fraction of total social labour. Indeed, in the extreme, some commodities may embody no social labour at all and yet be sold for a ositive rice. Marx called labour that is not social labour unroductive labour. The terminology is unfortunate, being easily conflated with unnecessary, which is something quite different. Unroductive labour is the labour (of caitalists or their agents) involved in hierarchical suervision, and the circulation labour involved in the transfers of titles of ownershi (tyically commercial labour engaged in activities of sale and urchase, and financial labour engaged in the mobilisation of sums of money for roduction). These activities have become increasingly imortant, and this general aroach to value theory allows some analytical urchase on the henomenon. Value theory and the individual firm This aroach to the labour theory of value is oerational in the sense that its rimary categories can be measured (at least to a reasonable degree of aroximation) in the National Accounts. At the aggregate level there is just one value quantity: total labour value added, which, via the value of money, is the same as net value added in monetary terms. But what firms contribute to total social labour and what they receive is generally different. They have no knowledge or interest in the former, and in this sense the labour theory of value is not oerational at the level of the individual firm. But what a firm receives is its raison d etre; it is quantifiable, and firms seek to make what they receive as large as ossible. Thus the labour theory of value embraces two strands: a theory of cometition as firms attemt to maximise their net revenues, and a theory of roduction which imoses systemic constraints on what there is in the aggregate to distribute. The traditional neoclassical aroach of rofit maximisation in different market structures is a onesided and distorted reflection of this reality. It is one-sided, because it reflects only the rocesses of exchange and circulation. The more recent transactions cost aroach is hardly an imrovement because it seeks to theorise a sace for roduction only in what cannot be exchanged. And it is distorted for two reasons. First, the focus on equilibrium (rather than reroduction) as an organising rincile imoses a static harmony on what is a dynamic war. Second, since cometition is a dynamic war, firms must always be interreted in terms of a quest for monooly advantage; in some cases through size, in some through technological advantage of roduct and/or rocess, in some through the successful marketing of brands, and so on. More recent game theoretic aroaches that focus on information, credibility, reutation and the like, in situations in 7

8 which identities matter and markets are not anonymous and imersonal, are a significant imrovement on the traditional neoclassical aroach. But they remain limited by their focus on (Nash) equilibria and sub-game erfection rather than reroduction. And nowhere is there a serious focus on roduction and what systemically imoses constraints on what cometition can achieve. In sum, individual firms have no knowledge of, and can have no knowledge of what they contribute to total social value. All they are interested in is what they can aroriate of total social value, which aears to them as their own rofit roduced by their own effort. A articularly emhatic way of making this oint is through consideration of unroductive labour. This is a category that has little meaning at the level of the individual firm, for any firm will emloy labour whose marginal revenue roduct exceeds its marginal cost, because any such labour is roductive of rofits. But whether such labour is roductive of value and surlus value, that is, is a comonent of total social labour, is a different question. For roductive labour is wage labour emloyed by caital. By contrast, the ure labour of suervision and all labour emloyed in those circulation rocesses that convert oututs (commodity caital) into money (caital) and thence into inuts (roductive caital) is unroductive from a social standoint. Productive and unroductive labour are macroeconomic categories, and are not aarent to the individual firm. At the level of society, what matters is the roduction of value and surlus value, and in the roduction of this some labour is unroductive. At the level of the firm, labour will not be emloyed unless it is roductive of rofit, and hence all labour is in this sense roductive. The reconciliation of these two different ersectives is a macroeconomic issue, and it is through this macroeconomics that value theory can aroach the analysis of individual labour rocesses. The constraints imosed by roduction Even though firms can have no knowledge of it, only a certain amount of aggregate value added is roduced at any one time. That labour which roduces it is aid wages in money terms, and what remains is surlus value in money terms (the roduct of surlus value in labour value terms and the value of money). Some of this surlus value finances wage ayments to unroductive labour, and what remains accrues in the aggregate to firms as rofit. There is therefore an overall average rate of rofit, determined by the activity of all firms taken together, which is both the driver of the rate of accumulation (via investment) and hence the rate of emloyment and unemloyment, and the driver of the distribution of dividends. The evolution of this rate of rofit is the critical summary statistic of the caitalist mode of roduction in any lace over any time eriod. 8

9 This can be written as follows. Define symbols as follows. r is the rate of rofit; P is aggregate rofits in money terms; K is the aggregate fixed caital stock in money terms and RK in real terms; Y is aggregate value added in money terms and RY in real terms; w is the hourly wage rate; H is the aggregate of hours worked; -subscrits indicate a reference to roductive labour, so that K for examle is the fixed caital stock with which roductive labour works, and H indicates the aggregate hours worked by roductive labour worked; otherwise is a rice index and the subscrit on indicates what it is a rice index of. Then the rate of rofit is the roduct of rofit share and caital roductivity (weighted by the share of roductive fixed caital in total fixed caital) P P Y K r = = (1) K Y K K The evolution of the rate of rofit over time is therefore exlicable in terms of the evolution of each of the terms on the right hand side of equation (1). Consider each in turn. First, consider the rofit share. Write this in terms of the roductive wage share: P Y W W = 1 (2) Y W and note that the roductive wage share can be decomosed as the ratio of the real (roductive) wage to labour roductivity W Y w w H y = = RY y RY (3) H Hence combining equations (2) and (3), 9

10 P Y w y = 1 (4) RY W H W Accordingly, for any given roductive wage share, the rofit share rises (falls) if the rate of change of labour roductivity is greater (less) than the rate of change of the real (roduct) wage; and the rofit share is negatively related to the roductive wage share. Note that if real wages remain constant, then a falling roductive wage share must be exactly matched by rising labour roductivity (which can only be how rising unroductive wages can be financed). So what is critical to the evolution of the rofit share is the relation between the rates of change of labour roductivity and the real (roductive) wage. Secondly, consider caital roductivity. This can be written as Y K K K RY K H K Y RY Y = = (5) RK K RK K K K H so that the rate of change of caital roductivity is determined by three ratios: 1. by the rate of change of the outut rice index relative to the index of the rice of fixed caital; 2. by the roortion of roductive fixed caital to total fixed caital; 3. by the difference between the rate of change of labour roductivity and the rate of change of fixed caital er hour. This third ratio is central. For the classical Marxian account asserted that it was through increases in real fixed caital er hour that labour roductivity increased, and that the rate of growth of real fixed caital er hour was greater than the rate of increase of the labour roductivity to which it gave rise. Putting equations (4) and (5) together, 10

11 w RY y H K Y r = 1 (6) RY W RK K K H W H Hence two tyes of variables roximately determine the rate of rofit: 1. the ratio of what is roductive to the total, with resect to both wages and the fixed caital stock; 2. the rate of increase of labour roductivity, relative to the increase of fixed caital er hour that facilitates it (a function of class struggle in the and to roduction rocess) the class struggle that determines how much of that increase in labour roductivity accrues to the labour that roduced it, and how much is retained by caital. And the relative rates of growth of labour roductivity and caital roductivity determine the rice of outut relative to the rice of fixed caital. The first condition is a structural intra-class issue, deending in large art uon the relation of commerce and finance to roduction (how the relations between articular fractions of caital evolve), and in small art uon the evolution of hierarchy in the management of the labour rocess. The second condition is an inter-class issue, as it summarises class struggle in roduction and distribution around labour roductivity. Since the rofitability of caital as a whole determines what is available for aroriation by individual caitals, these conditions both shae and constrain the cometitive activities of the individual firm. Consider as an extended examle the evolution of the US economy in the last third of the twentieth century. In the US economy, the rate of rofit fell from the mid-1960s through to 1982, and then rose to Recovering its early 1970s level before falling again to the end of the century. This is illustrated in Figure 1, which shows the rate of rofit, the rofit share and caital roductivity, each indexed to their 1964 levels. 11

12 Profit rate Profit share Caital roductivity Figure 1 Profit rate, rofit share and caital roductivity, USA, (1964 = 1) This eriodizes the develoment of the US economy into two distinct hases, that before around 1980 and that after. In economic olicy, the break is marked by the change in the Federal Reserve Bank s interest rate olicy of 1979; in olitical terms it is marked by the transition from the Democratic residency of Carter to the Reublican residency of Reagan. In ure class struggle terms it is marked most obviously by the destruction of the air traffic controllers union. There are many ways of illustrating this dramatic change. In terms of the rofit share, consider the evolution of the real hourly wage comared with labour roductivity, illustrated in Figure Labour roductivity Real (roduct) w age Figure 2. Labour roductivity and the real (roduct) wage (indexed to 1964, in log form), USA,

13 The data are both indexed to 1964 for comarability, and in logs so that the sloes of the grahs indicate growth rates. Until around 1980, labour roductivity and the real wage (of roductive workers) grew at about the same rate. Thereafter the rate of growth of the latter was effectively zero until the late 1990s. Not all of the difference however was aroriated by cororate rofits; a substantial roortion was diverted into the salaries of the higher echelons of the hierarchies of cororate structures. In terms of caital roductivity, consider the middle ratio of the right hand bracket in equation (6): labour roductivity to real fixed caital er hour. The latter roxies Marx s technical comosition of caital, and his thesis was that labour roductivity rises as the technical comosition of caital rises. The two terms are shown searately in Figure 3, again indexed to their 1964 levels, and in logs Labour roductivity TCC Figure 3. Labour roductivity and real fixed caital er hour, USA, (1964 = 1; data (in 1996 constant rices) shown in log form) U until 1982, the comosition of caital grew faster than labour roductivity; after 1982 the situation was reversed. This is just another way of saying that caital roductivity fell until 1982 and rose thereafter. But it is articularly striking that there was negligible growth in the comosition of caital after It is not just that labour roductivity grew faster then the comosition of caital after 1982; it is that the growth in the comosition of caital was negligible. The sources of labour roductivity growth aear to be different in the downswing and the uswing of the rate of rofit, or else the character of the caital stock changed markedly. This macroeconomic ersective indicates the evolution of caital in general. To reeat, no firm can know what of its activities counts as social labour; the macroeconomics rovides that account, and individual firms aroriate ortions of aggregate value added as wages and rofits. Hence the 13

14 macroeconomics rovides both the framework and the benchmark arameters against which the activities of the individual firm can be considered. (If firms try to aroriate more in the aggregate than has been roduced, then the value of money will fall; if less then it will rise. We do not ursue these imlications for inflation and monetary olicy here.) Value theory and the labour rocess In much of social science theorizing, the rocess of abstraction from all of the instances that are being considered is a rocess of determining what all of these instances have in common. Once their commonality has been established, the theorist can roceed on this basis of commonality to consider what differentiates the instances as different, and whether this differentiation affects how their commonality is exressed. In the resent context, abstracting from what differentiates individual caitals creates a notion of caital in general, whose behaviour is described by the macroeconomic ictures of the revious section. It is notable that while Marx aears to develo the labour theory of value through an analysis of the individual firm, there is a significant consonance between the accounting categories of the individual firm and the aggregates identified by the labour theory of value. For examle, at any oint in time, firms have money caital, that is, financial assets that will be used to urchase inuts (labour-ower, raw materials and other short-lived means of roduction, and machinery and other longer-lived means of roduction). They have roductive caital, which are inventories of raw materials and artly finished goods, and stocks of undereciated land, buildings, lant and equiment. And they have commercial caital, or inventories of finished commodities not yet sold. Once commodities are sold and costs are recovered, there are various obligations to be met (tax ayments to the state, distributions to bondholders etc.) and the remainder is an addition to money caital, to begin another circuit. The individual firm is treated as though it were reresentative of caital in general. There is nothing to differentiate individual firms one from another. But individual firms are different. The ersective roosed in this aer enables a focus on the following tyes of question for the individual firm in the US economy. To what extent is the labour rocess in this firm tyical of caital in general (falling caital roductivity to 1982 and rising to 1997)? Is technological innovation in this firm means-of-roduction-using and labour-saving? Did the character of the labour rocess in this firm change dramatically in the early 1980s? 14

15 If this firm is not tyical of caital in general, why not and how significant is this? 15