A Reassessment of Marx's Thought on Labour Exchange

Abstract

This article reassesses Marx's thought on labour exchange and illuminates its worth. In the Grundrisse and subsequent pre-Capital writings, Marx presented arguments that attached importance to worker subjectivity towards labour performance based on the distinction between labour capacity and labour. This afforded insights into the peculiarities of labour exchange that preclude market determination of wages and other working conditions and necessitate the intervention of class struggle and other socio-political factors in their settlement. The significance of Marx's perspective is further elucidated when compared with the classical tradition and the position of neoclassical economics. Although his emphasis on worker autonomy receded in Capital, his earlier arguments on labour exchange, it is posited, remain highly relevant to understanding industrial relations in today's capitalist economy.

Acknowledgments

I would like to thank two anonymous referees for their helpful comments on an earlier draft of this article. Any remaining errors are mine alone.

Notes

¹The quotations from the English translation of Marx's writings in this article are partly modified by reference to Marx & Engels (1976a, 1976b, 1980, 1981, 1982a, 1982b, 1983, 2004).

²Marx's notion of abstract human labour is not discussed here. For arguments against its physiological interpretation, see Postone (1993), Rubin ([1928] 1973) and Saad-Filho (1997).

³Roemer (1982, 1988) illustrates that exploitation in the Marxian sense can be demonstrated even by assuming a Walrasian market that admits of no extra-economic measures. This exposition suggests that proof of the intervention of class struggle in labour exchange should not be confused with the proof of exploitation.

⁴Furthermore, in the Grundrisse Marx still frequently used ‘labour’ to refer to labour capacity.

⁵‘The slave only works under the impulse of external fear, but not for his existence, which does not belong to him; the free worker, in contrast, is driven on by his own WANTS. The consciousness of free self-determination―of freedom―makes the latter a much better worker than the former, and similarly the feeling of RESPONSIBILITY’ (Marx, 1994, pp. 98–99, original emphasis).

⁶‘As an intrinsic element, each concrete useful labor has a specific form and aim; it is not measurable in quantity, and is distinguishable only in qualitative terms’ (Park, 2003, p. 163).

⁷‘Political economy knows the worker only as a working animal―as a cattle reduced to the strictest bodily needs’ (Marx, 1975, p. 242).

⁸For classical views on labour exchange, see Malthus (1989, Ch. IV), Mill (1965, Bk. II, Chs XI–XIV), Ricardo (1951, Ch. V), and Smith (1976, Bk. I, Ch. VIII). Lapides (1998) insightfully elaborates on the development of wages theory from the classical economists to Marx, although does not refer to the arguments of neoclassical economics.

⁹The hallmarks that differentiated the neoclassical theory of labour exchange from its classical counterpart are: (1) Classical economists regarded average wages as being determined by the proportion of the aggregate wages fund offered by capitalists to the population. Neoclassical economics assume the population to be given and for wages to correspond to the labour service price; (2) Classical economists wrote about the variation and determination of wages but paid scant attention to the amount of labour. Neoclassical economics discusses the variation and determination of both wages and the amount of labour; and (3) Classical economists hardly mentioned worker motivation behind the supply of labour whereas neoclassical economics attaches importance to it.

¹⁰For an extended discussion on the thoughts of the Marginalist Revolution triumvirate (Walras, Menger, and Jevons) see Okada (2011, 2012a, 2012b). For earlier literature comparing Marxian and neoclassical views on labour exchange, see Clarke (1982), Fine (1998), Gintis (1976), Green (1988) and Hodgson (1980).

¹¹Walras presupposed that personal faculties can also be used for private purposes as ‘consumable services’ as well as provided to entrepreneurs. He argued that an individual agent's supply of labour services measured in time is determined such that the equi-marginal utility–price ratio across all kinds of goods and services required for her utility maximisation―in terms of Gossen's second law―is realised (Pagano, 1985, pp. 111–113; Walras, 1988, pp. 301–303).

¹²Fine (1998, pp. 254–255) suggests that this characteristic holds for contemporary neoclassical theories of labour exchange that attach importance to imperfect and asymmetric information as well. Indeed, so-called post-Walrasian economics fails to illuminate the distinctiveness of labour exchange, which cannot be adequately accounted for by merely resorting to informational problems without due consideration for the attributes of human labour. The limitations of the contested labour exchange theory of Bowles & Gintis (1990), which attempts to rehabilitate key Marxian concepts with the aid of a post-Walrasian approach, can also be ascribed to this flaw (see also: Spencer, 2000; Stiglitz, 1987).

¹³Hodgson (1980, pp. 263–267) reveals the contradiction inherent in neoclassical economics that assuming the worker has a free will in the labour contract, it is necessary to negate that freedom when treating the appropriation of labour like that of machine services.

¹⁴‘In manufacture and handicrafts, the workman makes use of the tool, in the factory, he serves the machine. There the movement of the means of labour proceed from him, here it is the movements of the machine that he must follow. In manufacture the workmen form parts of a living mechanism. In the factory exists a lifeless mechanism independent of them, who become annexed (einverleibt) to it as living appendage’ (Marx, [1867] 1996, p. 425).

¹⁵For criticisms of Marx's theory of the value of labour power, see Bortkiewicz ([1907] 1952), Gintis & Bowles (1981), and Harvey (1983).

¹⁶Following Rubel ([1973] 1981), Lebowitz (2003) maintains that Marx kept intending to write a separate book on wage labour, which he had planned for in the Grundrisse, contrary to the view that this intent was absorbed into Capital, Book I, Part VI (Lapides, 1998, pp. 211–235; Rosdolsky, [1968] 1977, pp. 57–62). According to Lebowitz, this ‘missing’ book would have highlighted worker subjectivity and class struggle. Negri (1991) takes a similar position. It is difficult, as Oakley (1983) indicates, to resolve the ‘missing’ book problem categorically, but at least in Part VI Book I of Capital, where Marx criticised bourgeois concepts of wages and discussed types and national differences of wages, he did not adequately expound such impacts of worker subjectivity and class struggle on wages as had been suggested in the GPCW.

¹⁷Fine (1975, p. 60) states: ‘The rate of exploitation depends in the last analysis on class struggle in the economic sphere, that is to say conflict over wages and the length and conditions of the working day, the outcome being decided by relative class strength and organisation. This gives the quantitative distribution of value between capital and labour an [sic] historical element’. Even if this is true, it remains a fact that in Capital Marx did not present a specific argument on the determination of wages stressing the role of class struggle.

¹⁸‘Health services, for example, rely centrally on caring and affective labor, and the entertainment industry is likewise focused on the creation and manipulation of affect. This labor is immaterial, even if it is corporeal and affective, in the sense that its products are intangible, a feeling of case, well-being, satisfaction, excitement, or passion’ (Hardt & Negri, 2000, pp. 292–293).

¹⁹Employers' efforts to control labour will never ease in post-industrial capitalist society (see, for example, Hochschild, 2012).

²⁰Marx did not conceive that material production labour alone is ‘productive’, but he held that immaterial labour can also be involved in the creation of surplus value in the capitalist mode of production (Marx, 1989, pp. 12–13; [1867] 1996, p. 510). However, it cannot be argued that Marx attached due importance to actual immaterial labour in his age. He considered it to be mostly no more than ‘unproductive labour’, being exchanged not with capital but with revenue and creating no surplus value (Marx, 1989, pp. 7–130). For the relationship between Marx's economic thought and immaterial labour, see Meiksins (1981) and Sayers (2007).