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← 12. The Marxian Failure and Legacy

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  1. Prof: Okay,
    this morning we're going to
  2. finish talking about Marx,
    and we're going to focus on the
  3. failures of Marxism and the
    legacies of Marxism,
  4. and the failures are connected
    to the legacies in important
  5. ways that we'll unfold as we
    proceed with today's discussion.
  6. I began this already on Monday
    by talking about the
  7. difficulties with Marx's
    assumptions about scarcity and
  8. superabundance.
  9. And we saw that just as Mill
    couldn't banish politics from
  10. politics through the mechanism
    of a neutral definition of harm,
  11. Marx is unable to banish
    politics from politics by
  12. somehow wishing distributive
    conflict could,
  13. in principle, go away.
  14. We saw that that notion of
    superabundance that informs his
  15. communist utopia is incoherent
    in principle,
  16. and that means that
    distributive conflict is endemic
  17. to human society no matter how
    much wealth there is.
  18. And some principles for the
    distribution of income and
  19. wealth are going to have to be
    argued about and defended
  20. regardless of what is produced
    in society,
  21. or what could be produced in
  22. The second failure of Marxism
    is well known,
  23. but we should,
  24. mention it,
    which is that his historical
  25. predictions turned out to be
    hopelessly wide of the mark.
  26. Not only was he wrong in 1830
    and 1848 when he thought that
  27. communist revolutions were about
    to sweep through Europe.
  28. They were both (a) not
    communist and (b) quickly
  29. reversed, in any event,
    within a couple of years.
  30. His larger historical
    predictions were also wrong.
  31. He thought communism would
    come, socialist revolutions,
  32. for reasons that you now know
    because we've worked through the
  33. macro theory.
  34. He thought that socialist
    revolutions would occur in
  35. advanced capitalist systems that
    had become uncompetitive because
  36. of the replacement of
    competitive capitalism with
  37. monopoly capitalism,
    and in fact where we saw
  38. revolutions bearing the
    communist label was in peasant
  39. societies: in Russia,
    and in China,
  40. or in Eastern Europe in
    countries where it was actually
  41. more or less imposed from the
    outside by the Soviet Union
  42. after World War II.
  43. We didn't really see any
    society go through the sort of
  44. path Marx was thinking of in his
    larger teleological theory of
  45. history,
    namely from feudalism,
  46. to capitalism,
    to socialism, to communism.
  47. It simply didn't happen.
  48. And as the reversals of the
    revolutions of 1830 and 1848
  49. remind us on a smaller scale,
    Marx's bigger idea that there's
  50. some purpose or direction to
    history seems questionable by
  51. the first decades of the
    twenty-first century.
  52. History doesn't go in a single
  53. and this is a theme to which we
    will return,
  54. but you can see movements
    toward more egalitarian systems
  55. and then movements away from
    egalitarian systems.
  56. You can see democracy created
    and then you can see it collapse
  57. into authoritarianism,
    so that there isn't a single
  58. teleological or directional
    focus of history of the sort
  59. that Marx was looking for.
  60. So on the big predictions,
    Marxism doesn't look very good
  61. from the vantage point of the
    twenty-first century.
  62. But some of his smaller
    predictions were also wrong in
  63. ways that in some respect is
    more interesting for our
  64. purposes,
    and so I'm going to go back
  65. through some of his arguments
    and focus on things that were
  66. wrong with those arguments that
    we can,
  67. nonetheless,
    draw some interesting
  68. conclusions about as we go on
    our way in examining the moral
  69. foundations of politics.
  70. And I'm going to start with his
    macro theory and talk about some
  71. difficulties with that,
    and then I'm going to go
  72. backwards into the micro theory.
  73. So we're doing the reverse,
    if you like,
  74. of what we did on the way in.
  75. We started with the micro
    theory and we saw how that
  76. generated the macro theory.
  77. Now we're going backwards
    through the macro theory,
  78. and then we will go back into
    the labor theory of value and
  79. the assumptions about
    workmanship that underlie it
  80. that he took over from Locke and
    secularized and modernized,
  81. as you know.
  82. So if you'll recall from
    Monday's lecture,
  83. Marx's macro theory was an
    invisible hand theory like
  84. Smith's,
    except it was a malevolent
  85. invisible hand whereas Smith's
    was a benign invisible hand.
  86. And one element of it was the
    argument about the potential for
  87. liquidity crises,
    that there would be the
  88. possibility that people would
    horde money,
  89. that money would stop flowing
    through the system,
  90. and the system would thereby
    become sclerotic.
  91. It is the case that capitalist
    systems have the potential for
  92. liquidity crises,
    but one of the things Marx
  93. greatly underestimated was the
    capacity of capitalist states in
  94. capitalist societies to address
    things like liquidity crises and
  95. other things as well,
    we'll see.
  96. It's almost as if he didn't
    really take it seriously when he
  97. and Engels said,
    in The Communist
  98. Manifesto,
    that the state in capitalist
  99. society is the executive
    committee of the bourgeoisie.
  100. He underestimated what the
    state could actually do to
  101. preserve capitalism.
  102. A good example,
    in the early years of this
  103. system was a huge liquidity
    crisis in Mexico where the whole
  104. Mexican economy was on the verge
    of complete collapse,
  105. but the western governments,
    led by the United States,
  106. put together a fifty billion
    dollar package to pump liquidity
  107. into the Mexican economy until
    the crisis was over,
  108. and they succeeded.
  109. And so we didn't see the kind
    of collapse in the Mexican
  110. economy that that liquidity
    crisis had the potential to
  111. create.
  112. So the argument about the
    potential for liquidity crises
  113. is valid,
    but we have no particular
  114. reason to think they can't be
    managed once the sources of
  115. liquidity crises are understood,
    and governments have the levers
  116. available to them that were made
    available to the Mexican
  117. government during the Clinton
    Administration in the U.S.
  118. Secondly, Marx has this
    argument about the declining
  119. tendency in the rate of profit.
  120. As I said to you,
    every classical political
  121. economist believed that there
    was a declining tendency in the
  122. rate of profit in market
  123. and they thought one of their
    jobs was to account for it.
  124. They thought it was definitely
    the case that there is this
  125. phenomenon, and you had to
    explain why it occurs.
  126. In fact, if we look over the
    long course of capitalism since
  127. the nineteenth century,
    it's far from clear that there
  128. is, as an empirical matter,
    a long-term declining tendency
  129. in the rate of profit.
  130. In Marx's case,
    as you know,
  131. his story about the declining
    tendency and the rate of profit
  132. had to do with the increasing
    capital intensity of production.
  133. That as capitalists compete by
    relying more and more on what he
  134. calls constant capital,
    there's less and less fresh
  135. value created,
    and so what capitalist
  136. entrepreneurs do at the margin
    to be more profitable in the
  137. medium run makes them less
  138. So the capitalist who puts the
    spinning jenny in increases his
  139. profits in the short run,
    but when there are spinning
  140. jennies in every cotton factory
    in the economy the rate of
  141. profit is lower than before the
    first spinning jenny had been
  142. put in.
  143. And Marx identified that as the
    basic dynamic driving the
  144. declining tendency in the rate
    of profit.
  145. Two problems with it;
    one is that it assumes there's
  146. this sort of finite number of
  147. Because you could grant his
    argument and say,
  148. "Yeah, it's true that the
    rate of profit in the cotton
  149. industry will fall as it becomes
    more and more capital
  150. intensive,"
    but there are all kinds of new
  151. industries that are going to
    come into being all the time.
  152. So capital will flow eventually
    into other industries and
  153. they'll start out with big
    profit margins,
  154. and then the profit margins
    will get competed away,
  155. but then capital will so
    somewhere else.
  156. So unless you have this idea
    that there's a sort of fixed
  157. number of lines or production
    such that once profits start to
  158. fall in all of them they're
    going to fall economy-wide,
  159. there's no particular reason,
    even working from Marx's own
  160. premises,
    to think that he's come up with
  161. any lasting account of why the
    rate of profit would fall in
  162. capitalist systems.
  163. Moreover, even putting that
    problem to one side,
  164. if you think about it,
    even if it is the case that
  165. making production more
    capital-intensive reduces profit
  166. margins in the long run,
  167. if productivity goes up at a
    more rapid rate than capital
  168. displaces labor in the
    production process then you
  169. wouldn't necessarily see the
    rate of profit fall.
  170. So if the rate of increase in
    productivity exceeds the rate at
  171. which capital is displacing
  172. or to put it in Marx's jargon,
    constant capital is displacing
  173. variable capital,
    then there's actually no reason
  174. to expect the rate of profit to
  175. So it all depends on how much
    more productive capital makes
  176. labor, and there's no
    theoretical answer to that
  177. question.
  178. It's an empirical question.
  179. So even though Marx thought
    there was a declining tendency
  180. in the rate of profit it's
    debatable whether in fact there
  181. is,
    and it's certainly not the case
  182. that his theory explained why it
    should occur.
  183. His third argument,
    competition eliminates
  184. competitors,
    and because production is
  185. becoming more and more capital
  186. entry costs are going up and
    you're not going to see new
  187. people coming in to the market.
  188. I told the story about NASA and
    the O-rings on the Challenger
  189. blowing up.
  190. There was nobody to come into
    the market and take over then,
  191. so you have a monopoly,
    a not-very-efficient monopoly
  192. producer who lacks the incentive
    to innovate,
  193. and we have the sorts of
    problems we saw that developed
  194. with Morton Thiokol in that
  195. So that's also true only under
    a fairly restrictive set of
  196. assumptions which might not turn
    out to be true.
  197. After all, there are some
    industries in which there are
  198. economies of smallness.
  199. Think about Apple Computers
    invented in somebody's garage in
  200. California completely upending
    IBM and the big established
  201. capital-intensive computer
  202. and totally transforming that
  203. So it's not necessarily true.
  204. Marx had in his mind
    nineteenth-century industrial
  205. production,
    steel works,
  206. cotton factories,
    this sort of thing,
  207. but it's a very
    historically-bounded perception
  208. of what it is that goes on in
    economic systems.
  209. And there might be all sorts of
    sectors in the economy that tend
  210. to resist the development of
  211. and in which there are various
    economies of smallness that
  212. actually lend themselves to the
    constant entry of new players
  213. that keep revitalizing the
  214. And I think the information
    technology revolution that has
  215. accompanied your generation
    would be exhibit A in defending
  216. that proposition.
  217. Under-consumption,
    or sometimes it's said
  218. over-production,
    obviously it means the same
  219. thing.
  220. The way we put it into Marx's
    sort of conceptual scheme was
  221. the argument that the workers
    collectively couldn't buy
  222. everything they produced.
  223. Smith believed that.
  224. Ricardo believed that.
  225. Marx believed that,
    and early theories of
  226. imperialism were partly dreamed
    up in order to explain that;
  227. that you get imperialism partly
    as a result of the search for
  228. new markets to address the
    endemic weak demand in
  229. capitalist systems.
  230. Marx is not the only person who
    thought there was endemic weak
  231. demand in capitalist systems.
  232. Indeed, Keynes,
    the great English economist of
  233. the first half of the twentieth
  234. and the theorist whose ideas
    informed the policies to end the
  235. Depression also thought there
    was endemic weak demand in
  236. capitalist systems because of a
    diminishing marginal propensity
  237. to consume.
  238. Keynes' idea was if you have no
    money and I give you a dollar
  239. you'll spend it,
    but if you have a million
  240. dollars and I give you a dollar
    you'll save it.
  241. And so when you get into
    recessions the problem is weak
  242. demand,
    and so you get the Keynesian
  243. answer to recessions or
    depressions is to spend money at
  244. the bottom,
    for governments to do that
  245. largely through borrowing.
  246. And this is,
    of course, what first,
  247. the George W. Bush
    Administration in its final
  248. year, and then the Obama
    Administration in its first
  249. year, have been doing.
  250. A classic Keynesian response to
    what's now being called The
  251. Great Recession to prevent it
    from becoming a great
  252. depression.
  253. Namely, the state borrows
    money, tries to spend it in the
  254. part of the economy that will
    stimulate demand and then will
  255. get the economy going back up.
  256. So, again, this is an example
    of Marx's chronic
  257. underestimation of the capacity
    of the state to do things that
  258. will stave off crises,
    or manage crises,
  259. or prevent them from becoming
    catastrophically bad.
  260. And so I think we've seen a
    vivid illustration of that in
  261. the last couple of years.
  262. Finally, working class
  263. as all of these other things
    were going on and making the
  264. system creak at the joints and
    become less and less functional,
  265. Marx thought that the workers
    would start to become a
  266. class-for-itself.
  267. The workers would start to see
    that they were getting ripped
  268. off and get angry about it,
    become mobilized and militant,
  269. and reach the point where they
    believe that they had nothing to
  270. lose but their chains.
  271. Now there are two problems with
  272. One we already mentioned last
  273. This is that Marx was
    half-right in thinking that
  274. people judge their utility by
    what others get.
  275. They don't just ask the Reagan
  276. "Am I better off than I
    was four years ago,"
  277. they do pay attention to what
    others get,
  278. but they generally,
    and this is the part where he
  279. was wrong and a hundred years of
    industrial sociology has now
  280. pretty much established this,
    they tend to compare themselves
  281. to similarly-situated people.
  282. So workers in the auto industry
    compare themselves to steel
  283. workers or coal workers,
    not to the executives who run
  284. the firms in which they actually
  285. and that's true up and down the
    occupational scale.
  286. I think I mentioned a professor
    would be much more upset to
  287. learn that their salary is five
    thousand dollars less than the
  288. professor in the next office
    than they will be to learn that
  289. their salary is five hundred
    thousand dollars less than the
  290. attorney who lives down the
  291. People compare themselves to
    others, but to
  292. similarly-situated others,
    not to people very far from
  293. them in the socioeconomic order.
  294. And so that kind of militancy
    doesn't eventuate.
  295. More importantly,
    Marx actually conflates the
  296. relative immiseration of the
    proletariat with the absolute
  297. immiseration of the proletariat.
  298. So if we went back through the
    slides and we went back to the
  299. discussion of the theory of
  300. remember when we did that
    little exercise and we saw that
  301. you would all actually agree to
    be more exploited on his
  302. definition than less exploited
    when you had the choice of
  303. either going to a ten-hours
    working day with new technology
  304. or an eleven-hours working day
    without it.
  305. But that measure was a relative
  306. It was what you get as a
    proportion of the total surplus
  307. as compared with what the
    capitalist gets.
  308. It wasn't an absolute measure,
    and we saw that it's perfectly
  309. possible for the rate of
  310. as he defines it,
    to go up while the level of
  311. wages remains constant or even
  312. So wages might be going up as
    well as exploitation at the same
  313. time.
  314. Well, but if that's true you're
    never going to reach absolute
  315. immiseration.
  316. You're never going to actually
    reach the point where workers
  317. are literally falling into
  318. And if it's the absolute
    immiseration that has to trigger
  319. the militant action,
    the working class
  320. consciousness,
    it's not going to happen.
  321. And indeed, here again Marx
    greatly underestimated what
  322. governments can do to make sure
    that the workers don't reach the
  323. point where they have nothing to
    lose but their chains.
  324. In the 1950s,
    an English Marxian political
  325. economist called Ralph Miliband,
    whose son now is a British
  326. cabinet member,
    by the way, David Miliband,
  327. and is the likely next leader
    of the Labor Party after they
  328. lose the elections in May to
    David Cameron.
  329. David Miliband's father,
    Ralph, wrote a book called
  330. The State in Capitalist
    Society in the 1950s--
  331. I think it was 1954 but don't
    hold me to it--
  332. in which he said,
    "The welfare state is
  333. capitalism's best friend."
  334. The right always attacks the
    welfare state,
  335. but it's capitalism's best
    friend because it buys off
  336. working class discontent,
    and it ensures that workers
  337. have a stake in the existing
  338. and that they will never reach
    this preverbal situation where
  339. they have nothing to lose but
    their chains.
  340. So when you work your way
    through this macro theory it's
  341. riddled with holes and doesn't
    add up to the collapse of
  342. capitalism and not,
    therefore, particularly
  343. surprising that capitalism
    didn't collapse in the ways that
  344. Marx predicted.
  345. But now let's dig in a little
    bit more to the micro theory,
  346. and the micro foundations of
    Marx's thinking,
  347. because I think this is where
    we will find some interesting
  348. lessons for our own project in
    this course going forward.
  349. At the heart of the micro
    theory is the labor theory of
  350. value, and we're going to say
    something about three aspects of
  351. it.
  352. We're going to talk about
    Marx's assumptions about living
  353. human labor,
    the moral argument behind the
  354. labor theory of value,
    which many people you will find
  355. in this room find appealing
    despite the problems with the
  356. labor theory of value,
    and then some alternative
  357. formulations of what it is that
    he was trying to do.
  358. If you think back to when we
    were doing the exposition of the
  359. labor theory of value I said
    that Marx defends it,
  360. living human labor-power as a
    source of value,
  361. by saying it's the only thing
    that creates fresh surplus
  362. value, okay?
  363. So one difficulty is,
    and John Roemer points this out
  364. in that piece that I had you
    read, it ignores the
  365. contribution of dead workers.
  366. That living workers,
    for instance,
  367. when we talked about the
    introduction of machinery,
  368. the spinning jenny or whatever,
    what about the workers who made
  369. the spinning jenny?
  370. Aren't they part of this
  371. Aren't they being exploited
    either by the capitalist or by
  372. the living workers who use the
    spinning jenny?
  373. So if you took it seriously
    you'd have to say those
  374. exploitation indexes are way too
    simple because they don't
  375. capture the contribution of dead
  376. But then a second thing it
    doesn't capture,
  377. the labor theory value assumes
    the capitalist contributes what,
  378. nothing?
  379. But why isn't it the case that
    the labor that the capitalist
  380. performs also goes into the
    creation of the surplus?
  381. And again, I think you've got
    to imagine,
  382. get yourself back into this
    nineteenth-century mindset where
  383. intellectual work doesn't seem
    particularly important.
  384. You're just running these big
  385. But, of course,
    when we think about what the
  386. role of entrepreneurial ideas is
    in the creation of productive
  387. systems,
    it's absurd to say that the
  388. work of the capitalist doesn't
    contribute anything to the value
  389. of what's produced.
  390. But then you get into the
  391. well, how do you discover what
    is the result of the work of the
  392. worker and what is the result of
    the work of capitalist,
  393. and there's no mechanism for
    dealing with that.
  394. And then what about the fact
    that the worker in Marx's
  395. typical model has a spouse at
    home feeding him,
  396. making his sandwiches as he
    goes to the factory and so on
  397. and so forth.
  398. What about the spouse at home?
  399. Why is it just the worker who's
    being exploited?
  400. And various theorists have said
    if you take Marxism seriously on
  401. its own premises,
    it seems that,
  402. again, just as with the dead
  403. the stay-at-home spouse is
    either being exploited
  404. indirectly by the capitalist or
    is being exploited by the worker
  405. who goes to work for whom she is
    doing unpaid labor.
  406. And so we've had a series of
    feminist critiques of the labor
  407. theory of value.
  408. And this gets recognized in
    daily life.
  409. There is a very interesting
    1986 divorce case in the State
  410. of New York in which a couple
    had gotten married,
  411. he had gone to medical school,
    she had stayed at home and
  412. darned his socks and made
    sandwiches for him,
  413. and helped him through medical
  414. Anyway, many years later they
    get divorced.
  415. And apart from the usual issues
    in the divorce,
  416. the court said that the
    stay-at-home wife had a property
  417. interest in her husband's
    medical practice that was a
  418. byproduct of the work that she
    had put into it by darning his
  419. socks and making his sandwiches,
    and he went to class and built
  420. up his practice.
  421. And so they awarded her a forty
    percent property interest in the
  422. practice and required him to
    maintain life insurance in her
  423. name for the rest of his life so
    that her property interest could
  424. be protected.
  425. So what you can see once you
    start to do this,
  426. you know, I've just given three
    areas where this runs into
  427. trouble,
    once you take seriously the
  428. idea that labor-power,
    the capacity to work,
  429. is the source of value,
    why zero-in in this
  430. monomaniacal way on what one
    worker does in the production
  431. process?
  432. What about all of the others
    who contribute to the
  433. productivity of the process
    either directly as with the
  434. capitalist or indirectly?
  435. And of course once you make
    this point about the
  436. stay-at-home spouse,
    what about the Sunday school
  437. teacher that drummed the work
    ethic into the worker?
  438. Didn't that Sunday school
    teacher contribute something to
  439. the productivity of the worker
    and so on?
  440. So you're going to get this
    huge web of indecipherable
  441. entangled entitlements if you're
    trying to trace out who
  442. contributed what work to the
    creation of something of value.
  443. More fundamentally let's dig
    into the assumption that making
  444. creates entitlements.
  445. After all, for Marx this is
    what seems to give the theory
  446. its ideological edge.
  447. As I said, it's a secular
    version of Locke's workmanship.
  448. It's the claim that workers
    produce something for which
  449. they're not compensated.
  450. They produce something and the
    capitalist takes it,
  451. right?
  452. That's the claim.
  453. And when we were doing the
    exposition of that I said that
  454. what differentiates labor-power
    from all other commodities is
  455. that it's necessary for the
    production of every commodity.
  456. It's the common denominator of
    all commodities.
  457. Remember I gave you the example;
    I said if I have a certain
  458. amount of money and I spend it
    on a meal,
  459. I consume the meal and it's
    gone, whereas if I spend it
  460. paying somebody to paint my
  461. at the end of having consumed
    their labor-power I have a more
  462. valuable house.
  463. If I go to sell the house I'm
    going to get more from it than I
  464. would have gotten but for not
    having had it painted.
  465. And so that's the idea that the
    consumption of living human
  466. labor-power leads to the
    creation of fresh exchange
  467. value,
    whereas mere consumption of a
  468. meal doesn't.
  469. Terrible argument.
  470. What's wrong with it?
  471. Nobody can see what's wrong
    with it?
  472. Come on.
  473. It's a terrible argument,
    hopelessly bad argument,
  474. anybody?
  475. Yes, ma'am?
  476. Student: Could the meal's value
    be that it keeps you alive?
  477. Professor Ian Shapiro:
    Say a little more.
  478. You're dead right.
  479. Student: So the meal,
    even though you can only use it
  480. once, it is necessary for the
    sustained value of yourself.
  481. Professor Ian Shapiro:
    Okay, and just take that
  482. thought a little further.
  483. Where does it go?
  484. You're dead right.
  485. Student: So the value is
    constant, or something?
  486. Professor Ian Shapiro:
    Well, not exactly,
  487. but the point is it's just
    wrong to say when I consume that
  488. food it goes,
    because after all I have more
  489. calories of energy which I could
    then use to paint my own house
  490. with, let's say.
  491. Of course I might sit on the
    couch and watch the Super Bowl
  492. and just get fat,
    but that's my own decision,
  493. right?
  494. I can use that energy to paint
    the house.
  495. So a very interesting Cambridge
    economist called Piero Sraffa
  496. wrote a book called The
    Production of Commodities by
  497. Means of Commodities.
  498. Even though it's about an
    80-page book,
  499. it took him thirty years to
  500. That's a whole different story
    which I don't have time to go
  501. into.
  502. But this is what he said that's
    of interest to us.
  503. He said, "Imagine an
    economy that has three
  504. commodities, corn,
    books, food,
  505. I'm sorry, corn,
    books, labor.
  506. Corn is food;
    corn, books and labor.
  507. Yes, it's true that it takes
    labor to produce corn and to
  508. produce books.
  509. Yes it's true that it does not
    take books to produce corn or
  510. labor, but it's not true that it
    doesn't require corn to produce
  511. labor and books.
  512. So corn, or food,
    or anything that's necessary
  513. for the production of
    labor-power is going to have the
  514. same property that labor-power
  515. It's going to be present
    necessarily, directly or
  516. indirectly, in all lines of
  517. And so Sraffa said,
    based on that idea,
  518. you can do a corn theory of
    value for this economy that will
  519. have exactly the same
    mathematical properties as the
  520. labor theory of value,
    and then you can have your
  521. theory of the exploitation of
    corn by capital,
  522. the rate of exploitation of
    corn by capital that will be
  523. exactly analogous to the rate of
    the exploitation of labor by
  524. capital.
  525. There's no difference,
    mathematically identical.
  526. Why is that interesting to us?
  527. It's interesting to us because
    it shows you that whatever Marx
  528. says about exploitation merely
    being a technical notion,
  529. it's not.
  530. It's a moral idea.
  531. Colloquially we talk about the
    exploitation of natural
  532. resources, but we don't say that
    the corn owns what was produced
  533. with the corn.
  534. We don't say the corn was
    exploited in the way the worker
  535. was exploited,
    we just don't.
  536. Think about an intermediate
  537. the horse down a mineshaft in a
    coalmine hauling trucks of coal
  538. from the face to the elevator
    that's going to take it out.
  539. We could do the whole Marxian
  540. We could say the horse covers
    the cost of its feed in the
  541. first hour of the day,
    and it works ten-hour days,
  542. so the other nine hours it's
    producing surplus that accrues
  543. to somebody other than the
  544. Is the horse exploited?
  545. Yes?
  546. No?
  547. Nobody thinks the horse isn't
  548. So a much trickier case,
    and the reason it's tricky is
  549. some people are much more open
    to the idea of animal rights
  550. than others, right?
  551. So Locke said animals were the
    waste of God put there for our
  552. use, but we're not that
  553. some of us.
  554. So if you think of the horse as
    in some sense a kind of moral
  555. agent then it's not a happy
    thing that it's being exploited
  556. in this sense.
  557. But whether or not we want to
    say the exploitation is unjust--
  558. not just cruel if the horse is
  559. but unjust--depends upon some
    prior idea that creatures are
  560. entitled to the product of their
  561. That's the workmanship idea.
  562. And that is why even if you
    reject the labor theory of
  563. value, you're still left with
    this nagging idea that there's
  564. something to workmanship.
  565. Most people are not going to
    want to totally get rid of
  566. workmanship.
  567. If I write a book I think,
    "I put all that blood,
  568. sweat, and tears into that
    book, it's mine.
  569. It's mine, my work."
  570. Somebody takes it,
    "You've stolen something
  571. that I made."
  572. It's a very powerful thing in
  573. But not everybody accepts it,
  574. Not everybody accepts this
    idea, this very
  575. individualist-centric conception
    that we own what we make.
  576. We have this kind of
    exclusive--to go back to the
  577. language of Locke in The
    First Treatise,
  578. that God made us with the
    capacity to be miniature gods,
  579. to have the same ownership
    rights over what we make as he
  580. has over his creation.
  581. Look at Chief Seattle.
  582. He has a very different view.
  583. "This we know:
    the earth does not belong to
  584. man, man belongs to the earth.
  585. All things are connected like
    the blood that unites us all.
  586. Man did not weave the web of
    life, he is merely a strand in
  587. it.
  588. Whatever he does to the web,
    he does to himself."
  589. Very different view of the
    world and our place in it;
  590. not man-centric.
  591. One of the reasons we start
    this course with Locke is this
  592. is where the individualism comes
  593. It's this workmanship ideal.
  594. Doesn't look individualist at
    all in Locke's formulation
  595. because at the end of the day,
    it's a theological argument;
  596. it's an argument about God
    having maker's rights over his
  597. whole creation.
  598. But it's the move of saying we
    are miniature gods that can
  599. behave in a god-like fashion,
    and then secularizing it,
  600. which leads to the
  601. Or consider something that
    Robert Nozick,
  602. a writer we're going to read
    later in the class,
  603. pretty soon,
    actually, starting next week--
  604. he makes fun of the labor
    theory of value.
  605. He says, Why does mixing one's
    labor with something make one
  606. the owner of it?
  607. Perhaps because one owns one's
    labor (self-ownership,
  608. if you like),
    and so one comes to own a
  609. previously unowned thing that
    becomes permeated with what one
  610. owns.
  611. Ownership seeps over into the
  612. But why isn't mixing what I own
    with what I don't own a way of
  613. losing what I own rather than a
    way of gaining what I don't?
  614. If I own a can of tomato juice
    and spill it into the sea,
  615. so that its molecules (made
  616. so I can check this) mingle
    evenly throughout the sea,
  617. do I thereby come to own the
    sea, or have I foolishly
  618. dissipated my tomato juice?
  619. Why is it that we want to say
    when I put effort and energy
  620. into something that it's mine?
  621. Very, very perplexing and
    tricky thing and we will come
  622. back to it in considerably more
    detail later in the course when
  623. we read John Rawls,
    because interestingly it's not
  624. until we get to John Rawls that
    we find anyone who's really
  625. willing to radically question
    workmanship and the
  626. self-ownership postulate that
    goes with it.
  627. Okay, so Marxism seems
    problematic, so what's left?
  628. And I think there are really
    two main things left.
  629. One is a negative argument that
    comes out of Marxism,
  630. rather than any of its positive
  631. and that is the fact that his
    theory of exploitation fails
  632. doesn't mean that he lacks a
    good critique of markets as
  633. distributors of either good or
    harms in society.
  634. We could go back to our story
    about Trump and the bag lady,
  635. for example.
  636. The Pareto superior result in
    that example,
  637. if you remember,
    was for the bag lady to die
  638. because there was no Pareto
    superior exchange that could
  639. occur between Trump and the bag
  640. Markets reflect the
    inequalities that come into
  641. them, but they don't give any
    account of the justice of those
  642. inequalities.
  643. So there's this problem,
    if you like,
  644. of the tyranny of the status
    quo, and we saw that in the
  645. economic realm with the analysis
    of that problem,
  646. and in the political realm when
    we talked about the corn dealer
  647. problem with Mill,
  648. That the market systems are
    biased towards the status quo,
  649. but market principles are
    purely procedural principles.
  650. They tell you nothing about how
    you got the status quo,
  651. and so there's a kind of
    garbage-in/garbage-out problem
  652. with market systems.
  653. Nozick, we will see,
    makes this point explicit when
  654. he says any remotely plausible
    theory of justice is going to
  655. have to have three parts,
    a theory of justice in
  656. acquisition (i.e.
  657. a theory of staring points),
    a theory of justice in transfer
  658. (i.e.
  659. a theory of exchanges),
    and a theory of the
  660. rectification of past injustice
  661. a theory for addressing
    accumulated injustices of the
  662. past).
  663. And Nozick will,
    for reasons which we will go
  664. into, thinks he has accounts of
    all of those things.
  665. But it's the negative argument
    of Marxism, that markets are not
  666. justified by reference to the
    failure of Marx's own
  667. alternative theory,
    is good.
  668. If you're going to have a
    justification for the
  669. distribution that occurs through
    markets it's going to have to be
  670. something else.
  671. It's going to have to be
  672. Maybe it can be provided,
    but so far in the utilitarian
  673. and neoclassical traditions it
    hasn't been provided.
  674. So there's a kind of unfinished
    agenda there that's put on the
  675. table by the Marxian critique of
    markets even though Marx's
  676. answer to that problem,
    is unconvincing.
  677. And then I think secondly what
    Marxism leaves us to address is
  678. not an argument about the
    sources of value.
  679. The labor theory of value is
    just a hopeless analytical mess,
  680. and can't be resuscitated.
  681. There's no way to fix the labor
    theory of value.
  682. But there is an argument about
  683. Remember where we started;
    I said unlike the conventional
  684. wisdom that Marx is an
    egalitarian, no.
  685. He's a theorist of freedom.
  686. His utopian ideal is a world in
    which the free development of
  687. each is the condition for the
    free development of all,
  688. where our labor in not
  689. We saw that the utopian version
    of that is unsustainable.
  690. Nonetheless,
    Marx's definition of class,
  691. when you think about it,
    is really an argument about
  692. freedom.
  693. When he says you're working
    class if you have to sell your
  694. labor power to somebody else in
    order to live,
  695. it's the compulsion,
  696. It's the compulsion.
  697. It's not whether you choose to.
  698. I like lecturing here having a
    captive audience of people who
  699. have to listen to me ramble on
  700. It makes me feel good,
    but that's not what makes me
  701. working class,
  702. It's that I have to work for
    somebody else in order to
  703. survive.
  704. It's that element of compulsion.
  705. That's your lack of freedom.
  706. So as Roemer puts it in the
    essay that I put on the
  707. syllabus, it's that there's a
    class monopoly of the means of
  708. production which creates that
  709. that some people have the power
    to insist that other people work
  710. for them.
  711. So it's really not about the
    calculus of contributions and
  712. who puts what,
    and whether the rate of
  713. exploitation's two point
  714. or one point six or anything.
  715. It's not about that.
  716. It's really about the
    distribution of power in the
  717. production process.
  718. And if we're going to take
    anything from Marx that is of
  719. enduring value it's going to be
    an argument about power.
  720. It's going to be an argument
    which says that a world in which
  721. we organize things so that one
    class effectively has power to
  722. control a different class's
  723. that is an unjust world.
  724. And much of the neo-Marxist
    literature that people take
  725. seriously jettisons the labor
    theory of value and explores
  726. this power-based argument as the
    root of what it was Marx was
  727. trying to get at with the
    concept of exploitation.
  728. See you on Monday.