Did Marx Get Something Right?

Even the bravest intellectuals often become timid when it comes to defending the works of Karl Marx. Indeed, Marx’s constant failures in historical analysis and predictions largely discredit his theoretical hypothesis. First, Marx predicted a wave of communist revolutions in 1830. After realizing that his prediction was well off the mark, he tried again in 1848 – only to realize that he made yet another error. In the words of the Yale professor Ian Shapiro, revolutions that occurred during those time periods were “(a) not communist, and (b) quickly reversed within a couple of years.”

In addition, Marx failed in his understanding of revolutionary change in capitalist societies. According to his theory, communist revolutions should have occurred in the most developed capitalist societies. His reasoning was that when competitive capitalism is replaced with monopoly capitalism, the workers will rebel and bring about a communist revolution. Well, unfortunately for Marx, history proved the opposite. Not only did the revolutions occur in mostly undeveloped peasant societies but capitalism itself allowed for a creation of new players within monopolized markets. Furthermore, the notion of a teleological direction of history from capitalism to socialism has been largely shredded by the fact that societies have gone from the latter back to the former.

After such a long list of monumental errors (accompanied by an even larger list of smaller errors), it becomes difficult to see how any writing of Marx can be taken seriously beyond its literary value. However, there are two Marxian theories in particular that still remain relatively popular in academia. These are the Theory of Alienation and the Labor Theory of Value. Of course, a proper critique of either one of these theories would require a work of several volumes, something I am unable to execute here. What I shall do instead is briefly address the issue of the Labor Theory of Value, leaving much room for discussion of the Theory of Alienation in my future works.

The Marxian Labor Theory of Value can be summarized as follows: the value of every product is determined by the average manual labor used in its production. In other words, Karl Marx believed that everything made or manufactured by the working class ultimately belongs to the working class itself, for they are the ones who produced the value of the product. From the workers who diligently labored in the iron mines, to the workers who assembled the factory tools, to the workers who used those tools to produce, say, ice cream: they are all the true proprietors of the product in the market, not the greedy factory owners. Quite clearly, this conceptualization of economy turns the traditional capitalist method on its head.

Yet there are some major flaws here that can be easily visualized through a hypothetical scenario. Suppose an imaginary state is full of thousands of ice cream factories that produce thousands of pints of ice cream a day. Think of the labor that requires: countless hours spent in the factories, countless more hours to supply and build those factories, and even more hours of labor from those who supplied the suppliers of the factory, and so on. In other words, an astronomical amount of working-class labor went into the production of a $10 million profit by our imaginary factory.

Now suppose somewhere in the outskirts of the city a scientist accidentally stumbles across a discovery that confirms that consuming ice cream decreases life expectancy by at least ten years owing to some previously undiscovered fatal chemical. Of course, the value of ice cream after such a discovery falls substantially, to where the factories around the city begin to close in record numbers. However, here is an important observation: the value did not decrease due to the decrease of labor in production of ice cream. To the contrary, the value of the product decreased by a comparatively minimal input of labor from an individual that has never taken part in its production. In other words, different types of labor tend to have different capacities of effect on the value of a particular product.

Suppose we take our example even further and say that there are only two remaining factories in the whole city. Both of these factories employ a thousand workers and are on the brink of bankruptcy. The executive of one factory, however, finds a way to produce his ice cream by replacing the dangerous chemical with a safer substitute. This bold action allows his company to survive and return to making its $10 million profit. Of course, the intensity of labor of the working class and the factory workers did not change throughout the entire process. However, their fate, employment, and the value of the product were largely dependent on minor contributions from labor with a greater capacity of effect.

It’s not difficult to see the latter observation in everyday life. If two people were to exercise side by side, with person A doing thirty improper push-ups, and person B doing ten proper pull-ups, then person A would undoubtedly do more labor that would take more time. However, it would not be hard to see that person B would actually add more muscle than person A by, in a sense, laboring less. The flaw with Marx’s hypothesis can, therefore, be summarized in a single sentence: While the Labor Theory of Value argues that labor determines value, it does not fully account for the value of labor itself.

Indeed, just as the body may be greatly rewarded by certain exercises that require less labor but proper technique and execution, so too must the monetary reward be higher for the individuals whose labor carries a greater capacity for effect. After all, while a single mistake in the execution of production may cause a loss of a single good, a single mistake in the execution of executive decisions may cause a loss of the entire factory, and all the subordinate labor to which it is a host. Consequently, the value and ownership of a certain good must be more dependent on the capacity of the effect of labor and not simply the average labor input itself.

The latter conclusion further raises another question, this time for Karl Marx himself. If the pen, paper, and printing houses through which he published his work were ultimately produced by the labor of the working class, then why did he take the credit for his own writing? It is rather unfortunate that Marx is not here to provide us with an answer.