Commentary on Political Economy

Thursday 27 October 2011

Draft Note on Keynes and the Marginalist Theory of 'Labor' - Comment on Martin Wolf's Column on "Big Questions" and New Strategy

This is my short reply to a Martin Wolf Ft article about "the big questions" raised by the wave of protest movements we have seen around the world over the last few months.
schelling | October 27 11:18pm | Permalink
Quite a thoughtful summary from Wolf considering the obvious limitations of space. He hits the target in two respects, the first historical, concerning the conservatism of the social democratic "labour" parties of the last century aiming exclusively at "defending" wages and conditions, and the second and more important concernig the apparent absence of an over-riding "ideology" (I prefer to call it "strategy") of the Left and of a "historical agency" (such as formerly the "industrial working class") to put such a "strategy" into effect. We need, with Gramsci, a new "philosophy of praxis".

In my own case, as I have already acknowledged on his Exchange, Mr. Wolf played a significant role "through" his Exchange initiative, in my return to politico-economic theoretical reflection, the products of which are now assembled at - to which I extend an invitation to "all friends of good will". Cheers.

What Wolf suggests - the development of a new "strategy", a new "set of ideas" he calls "ideology" - is exactly what we are doing here almost on a daily basis. Here is the latest instalment, a draft discussion of Keynes's espousal of the marginalist or neoclassical theory of "labour". This piece will be reworked and I hope to re-publish it in its new form over the next few hours. But I am posting it now so you can form a view of the thought process that goes into the development of this "strategy". Ciao.

In the chapter on “The Postulates of Classical Economics”, Keynes sets out quite successfully to demonstrate the flaw in Say’s Law – that supply creates its own demand  and that therefore there cannot be any involuntary unemployment – on the ground of the discrepancy that exists between the postulate that aggregate supply equals aggregate demand in terms of money prices, whereas the employment of labour is expressed in real terms: the utility of the real wage at equilibrium equals the marginal disutility of labour. We noted above how Keynes simply fails to tackle the problem of how “real” quantities can be “aggregated” or “homologated” in terms of “marginal units” constituting the “marginal product of labour” and how indeed this “marginal product” can then be homologated or equiparated with the notion of “marginal disutility of labour”.

Try as one may, it will never be possible to achieve such a monstrous feat except by means of the most fantastic leap of the imagination closer to certain forms of insanity than to any process of ratiocination. Keynes never questions for a single instant what is the most basic tenet or “postulate” of marginalism and neoclassical theory.

To make matters worse, Keynes never does even so much as question the neoclassical postulate of “labour” as a homogeneous substance that can be “quantified” at least in terms of its “marginal product” and then of its “marginal disutility”. For if by “labour” we intend the “living activity” of human beings, it is evident that no amount of “measuring” will ever turn such living labour into a “substance” that can be measured in terms of its potential “marginal product”! Living activity is a pure human “reality” that cannot be equiparated with its “product” except through the most absurd reduction (or transmutation)! Indeed, the very fact that such a “reduction” is politically possible is indicative not of the “measurability” of living labour but of its repressive abuse and alienation by the powers interested in enforcing – more or less violently – such perverse reduction. The “measurement” of human living activity can occur only by “abstracting” fictitiously, and that means violently, through the coercion of human activity, from its subjective form of expression and also from its mode of objectification, that is to say, through the “alienation” or “separation” of living labour from the “object” of its exertion without which it is a pure and sterile concept, a mere figment of the imagination, a pure fantasy.

And this “object’ from which living labour is “separated” forcibly by capital is not solely the individual tools and raw materials to be used in production, in the “objectification” of living labour. First and foremost is the “separation” of living labour from its being intrinsic part of “social labour”, that is, of being absolutely inseparable from the process of “social labour” without which it would be utterly meaningless. That is what “the wage” achieves; that is its real purpose: to slice and divide the living labour of workers into “separate individual labours” – separate from both the means of its objectification and from their “sociality” so as to be absurdly “measured” and “compensated” as “individual separate labours”!

Keynes abjectly acquiesces in this absurd exercise, culpably lending credence to what must surely be the most repugnant theoretical myth in the horrific history of bourgeois supremacy. But this is not the end of the unseemly mystification in which Keynes engages with arguable degrees of complicity with the marginalist counter-revolution of the neoclassical school. Keynes also fails to question the very notion that “the utility of the real wage” can be commensurate with the “marginal disutility of labour”. Given that there is no such entity as “abstract quantifiable labour” except as a criminally violent imposition of the bourgeoisie of its command over living labour, it follows that living labour as the living activity of human beings simply cannot have a “disutility”. Human living activity can be either “free” in the sense that it constitutes the objectification of autonomously determined human abilities or else it can be the object of more or less violent imposition. It is totally insensate to speak of the “disutility of labour” – because once we define “labour” properly for the only manifestation it can assume – that of living activity – then it becomes apparent how “disutility”, whatever that expression may mean, cannot even remotely be applied to such living activity!

To compound Keynes’s absurd ignorance of even the most basic theoretical appreciation of human reality and social meaning, Keynes thoughtlessly accepts the “equation” of living labour (and its absurdly attributed “disutility”) with the “utility” of a “real wage” made up obviously of the products of human living labour. Again, it is impossible to attribute to the pro-ducts of living labour – the objectification of living labour, what we call “dead labour” – any “utility” however “marginally” measured. The very act of equating dead labour with living labour is an act of violence so vile and violent that any and every decent human being ought to detect it the instant that this gross misapprehension is exposed!

It is absolutely obvious from the foregoing analysis that no conclusions of any sort can be drawn form Keynes’s analysis and internal critique of “the postulates of classical economics”. As we have argued, Keynes evades the insuperable scientific and analytical difficulties posed by this phantasmagoric neoclassical theoretical framework by concentrating his analysis on monetary “aggregates” of supply and demand that transpose his entire analysis to the level of overall political command through the monetary medium. Let us see how. [Money wage]

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