Reply to Tremblay's "Debunking 'Myths of Socialism'"

Reply to Tremblay's "Debunking 'Myths of Socialism'"

Francois Tremblay's article Debunking 'Myths of Socialism', addresses the section of the Anarcho-capitalist FAQ entitled "What are the Myths of Socialism."

Francois e-mailed me about this "debunking," but at the time I was busy, and only gave it a cursory glance. I figured that Francois Tremblay, who wrote that wonderful anarcho-capitalist book "But Who Will Build the Roads," would refute the silly LTV without my help. Imagine my surprise to find that Francois believes in the LTV! So here is a belated reply.

The debunking starts with a mysterious ad hominem about "racist and sexist demagogues." I'll let that slide, since it's irrelevant.

I point out "In the desert, one may prefer a cup of water to a diamond." Francois responds, "the idea of value being subjective is an equivocation on the term value, a confusion between moral values (i.e. what we desire) and economic value (i.e. how much something is worth)." He misses the whole point of the STV. No one is saying that subjective utility ("moral value") is the same as exchange value. The beauty and elegance of the STV is that it describes how subjective values give rise to exchange value. For a single person, the subjective value gives a maximum price that person would be willing to pay. For many buyers, the exchange value is an amalgamation of all those buyers' subjective utilities.

Francois claims that, "the example doesn't even apply to the capitalist's subjective theory of value [since] prices don't fluctuate from person to person depending on how thirsty or hungry they are." First of all, prices can fluctuate so, e.g. I use discriminatory pricing for chess lessons. I charge the Wal-mart executive more than my student who is a janitor. But aside from that, from my comment in the previous paragraph we see that the STV does apply to a single thirsty buyer, as well as to commodities with many buyers. The STV is general enough to cover these cases, unlike the LTV which only applies to reproducible commodities with many buyers, stable demand, no significant technological advances, and various and sundry other qualifications.

The mudpie example refutes the primitive "labor imputes value" form of the LTV. It forces LTVers to make a major qualification - admit an exception - that the LTV only applies to commodities. (Not products in general, but only commodities.) It is simplistic, but apt.

The comment about "the Misesian premise of purposeful action" is not relevant. The assumption is that the mudpie makers are acting purposefully. Assume they are children, or very bad entrepreneurs, or overly optimistic artists.

Francois claims that the wine aging example is circular, but doesn't explain why. He writes, "The fact that the bottle of wine ‘gains value simply by aging' in the capitalist system does not actually indicate that it has gained actual worth and is not an indication of its just price." This is a red herring. We are discussing exchange value, and whether the LTV can predict it by its one-factor labor model. We are not discussing "just price." But his comment does illustrate how easily LTVers can illegitimately slide into the medieval just price doctrine from their descriptive LTV notion. (The contention that letting wine age in a cave requires more labor that growing grapes and producing fresh wine is ludicrous, and a question of fact.)

Francois basically argues that consent (as normally defined) doesn't matter, and that "exploitation" is bad whether or not individuals give consent. This is an issue too heavy to resolve here. Individualist anarchists like Benjamin Tucker took consent to be ethically decisive and respected contracts, while the anarcho-communists did not.

Francois writes that, "by definition exploitation is unethical." That is begging the question, which is: Is profit, i.e. taking the "surplus value," moral? Sure, Marx used the loaded term "exploitation" to evade any proof of immorality. We could just as easily use the term "utilization of labor" rather than "exploitation." Or we could give a positive spin by calling it "rational utilization of labor." Simply using a connotative term does not prove any wrongdoing.

Francois says, "One cannot merely dismiss ALL cases of alleged exploitation against the workers and leave it at that, unless one has a universal argument against its existence." This is a straw man. I have never said that workers are never exploited. I have simply said that the Marxian "profit is evil" argument fails. It is basically a bald assertion using a connotative term.

The Bohm-Bawerk argument demonstrates that there are other, more solid, explanations for profit than Marx's bald assertion. Personally, so long as the interactions were voluntary, I don't think any justification of profit is necessary.

Francois writes, "And for another thing, wage workers don't generally get paid prior to their product being sold, but rather afterward." For many items, like cars and computers, like construction work on buildings, etc. the workers are paid before the item is sold or completed. Even for fast food, interest on money invested in capital goods would explain a lot of interest.

Francois denies that "man's desires exceed available goods," which I called "a fact of reality and human nature." I'm dumbfounded, since this is so obvious. Proof: Positive prices for many/most goods and services. There are a few things, like air, which currently are not scarce in the economic sense. But most things are scarce, and not free. If you base your philosophy on everything being free and humans not wanting more (thus creating scarce items,) you are evading reality and depending on a major change in the nature of man.

Francois comments about Proudhon's definition of property miss my point, which is: Property (in the general sense, not the Proudhonian non-standard sense) is a convention regarding use of things. Sticky (neo-Lockean) property and possession property are both types of property - both are property systems. Geoism is another - like sticky property except for land. Then there are communist property systems, where only "blessed" collectives are allowed to own capital goods used by groups.

I agree with Francois that corporations have the same information problem as socialist entities that don't use money. Apparently he agrees that this is a problem with such socialist positions. I don't understand why he thinks my point is disingenuous. Does he think I support such "internal socialism" of corporations, or consider corporations to be models of efficiency? I don't. I think that corporations as we know them would become much less important if not rare in a free society.

Francois: "I will not address the claim that it's "naive" to think that modern society can get along with money, apart from saying that it manifests the same lack of justification that we saw earlier. Money is more than "the most liquid commodity": it has to be a medium of exchange."

It is obvious to me, and no doubt most readers, that a modern division of labor society requires a medium of exchange. Some things are too simple to justify unless asked.

I think Francois agrees with me that the attempt by statists to mold people, as if human nature were infinitely malleable, is misguided and doomed to failure. He quibbles with my phrasing (which I have now corrected), and agrees - then forgets we are discussing myths of socialism and makes up an unrelated "real question."

For an excellent detailed debunking of Kevin Carson's version of the LTV, read The Labor Theory Of Value: A Critique Of Carson's Studies In Mutualist Political Economy, by Robert P. Murphy

Hogeye Bill
May 12, 2011