I've read with great interest Steve Keen's Dissertation on the Labour Theory of Value. In Keen's view, Marx actually abandoned the Labour Theory of Value while writing his critique of the Gotha program. In that paper, Marx admits their are natural sources of value beyond human labor.
But he seemed to find this discovery inconvenient in writing Capital, and does not develop it there.
Although it was originally developed by Adam Smith and David Ricardo, today pretty much only Marxists cling to the Labour Theory of Value today. Neoclassical economists have a hedonic theory of value, determined by people's subjective choices. I can see both value and error in both approaches.
A theory of Profit could be developed with or without the Labour Theory of Value, though it is easier with that frame to produce Excess Value. But the key thing which Marx derives from the Labour Theory of Value is the tendency for Profit to fall, thereby leading to Imperialism, and ultimately leading to communist revolution.
But it doesn't seem that the rate of Profit has necessarily fallen, or that communist revolution is inevitable in the most advanced Capitalist countries. (Or at least not until recently, when things are clearly going haywire thanks to unremitting drive for US Hegemony, primarily.)
So it these regards Marx seems now like the historical Jesus, whose actual messages is reputed by historians to be "Repent, the end of the world is at hand." The Apostle Paul reworked that message in combination with Jesus' alleged resurrection into a different kind of less time bound religion based on Faith. The millenial part was downplayed. So it has been with Marxists also.
What I've never seen properly explored, to my mind, is how the Labour Theory of Value includes what could be called Normative elements. By looking only at the human production (or extraction) of value, we downplay a lot of people within Capitalist, Feudalist, and perhaps even earlier human societies consider to be wealth.
So, for example, the Physiocrats considered Land to be the ultimate source of value. Keen looks back to the Physiocrats as having got it right, which is easy to do if you consider Land in the more general form of Resources, which could include minerals, water, sunlight, wind, and the natural processes which recycle human waste.
But once we start looking at resources rather than labour we come right up against other questions, such as who "owns" the resources. If we only think of the human labour, we have abstracted away such concerns and don't have to think about them at all. And that is much more conducive to thinking about wealth on a collective scale. So it is that Adam Smith called his book the Wealth of Nations and not the Wealth of People.
While Smith might have gladly recognized that people own land, factories, etc, Marxists would prefer the ideal that wealth comes about from social production.
It's clear that once we throw Property into the analysis, the rate of profit from human labor need never fall, as the capitalist might (in theory) just keep increasing their property forever (though this is impossible), such as more and more automated factories.
Marx has ways of accounting for the machinery of factories in this way as valued by the labor that was put into them. But this leads to a conundrum.
This is what I want to explore.
I'm going to start with something simpler. Imagine a lake having streams running into it. Those streams are considred "free" but the lake is "owned" by some rich person, who charges commoners to extract fish from it.
In this case, the Owner did not do anything, nor was any previous human labor "invested" in the production of fish. All the owner did was obtain recognized possession of the lake and it's value, possibly by fighting wars. Such "wars" did not create wealth either, they simply allowed the victor to claim unique possession, recognized by other humans to the degree that they are no longer fighting over it.
So here we have something like Excess Value, but it did not result from capitalist investment. In fact this sort of income which goes to the owner is called Rent.
It was in this sort of way that the Spanish Empire, which started hundreds of years before Adam Smith and resulted in an unproductive economy that actually ultimately impoverished most Spaniards.
So it would have been reasonable for Smith NOT to look at wars and the seizures they may enable as any kind of source of wealth, though that had been historical and continues to this day in the popular imagination.
And Marx as well, taking a collective view.
The fact that one person may have "ownership" of the lake does NOT, in this view, make the collective union of all people wealthier. It might just as well have been someone else, or society as a whole, if not for how the lake is actually used by others, which might be regulated for better or worse by having one person own it.
In fact, it almost seems the Labour Theory ofValue presupposes that Earth is All for All of Us, and not reserved, say, for non-human species or processes. And we humans may chose to recognize the ownership of someone or some collective of some kind, but this does not make humanity as a whole more or less wealthy. It is only when someone DOES something with the resource that makes us more or less wealthy than we were primordially.
But that view of something useful to US only coming from labour discounts the massive potential in each and every resource, potential that might in fact be degraded by human usage, extraction, etc.
The ultimate source of value therefore comes from the ultimate potential use value of resources, either as they are or in use.
In most cases, exploiting a resource makes us less wealthy, to the degree it depletes that resource for more valuable future uses.
It should be clear we have badly abused the natural resources on earth increasing exponentially with the dawn of the Industrial Revolution.
We have pursued unsustainable population growth, war and vast arms (all pure waste), unsustainable development of fossil fuels, who best use is in chemical production for the (hopefully infinite) human future, and mostly left in the ground for now.
Instead, we've turned the earth into the waste bucket for our "wealth creating" growth.
What we've been doing is not becoming more wealthy, but less.
Now faced with a human catastrophe that would have been unimaginable before, a likely vast die off from climate change effects, and possibly extinction from that or nuclear war.
It would be folly to consider this lesser wealth, close to bankruptcy, and not the greatest human wealth of all history as assessed by financiers and Economists.
Bankruptcy is indeed the correct notion, as we have indebted ourselves to the earth itself, by stealing and burning so much of its contents. And then what have we done but create an unsustainable society on the edge of extinction?
Even though it has given many far more people far more hedonic value than ever before. The question is not how many happy people, but how many unhappy people, how many starving or otherwise suffering, now and in the future. Hedonicity is the natural state of nature, which humans reduce by adding to whatever degree their presence is unhappy. Every human is a cost to nature, the question is what is the minimum number of humans to have a happy, artistically, and technologically creative society of the scale that could in thousands of years mount defenses to challenges like asteroids, as that is an asset to other life on earth as well.
So this is how understanding the Potential Use Value works. In many cases, it's better to do less than more, especially when doing anything unsustainable, such as removing carbon stored from millions of years in a few hundred.
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