In 1979, Foucault wrote in 'birth of biopolitics'.
The American neo-liberals
he means 'neo-Classical' economists
say this: It is strange that classical political economy has always solemnly declared that the production of goods depends on three factors—land, capital, and labor—while leaving the third unexplored. It has remained, in a way, a blank sheet on which the economists have written nothing.
No. They believed there was a forth factor, 'Entrepreneurship', whose reward was profit, which combined the other three. Labor Economics was and is a flourishing field. It has nothing to do with Marxian stupidity.
Of course, we can say that Adam Smith’s economics does begin with a reflection on labor, inasmuch as for Smith the division of labor and its specification is the key which enabled him to construct his economic analysis.
Why bother say any such thing? Smith died long ago. Back then, fossil fuel was hardly used in industry. Industrial Capitalism was in its infancy. It made sense to have a 'labor theory of value' because the size of the population determined how much rent could be extracted.
Nobody actually reads Smith. Guys who do 'Labor Econ' are using computers and sophisticated econometric techniques.
But apart from this sort of first step, this first opening, and since that moment, classical political economy has never analyzed labor itself, or rather it has constantly striven to neutralize it, and to do this by reducing it exclusively to the factor of time.
There were no full-time classical economists. There were just some guys who wrote on economic matters from time to time. Their 'analysis' was rough and ready.
This is what Ricardo did when, wishing to analyze the nature of the increase of labor,
which was an increase in the number of laborers
the labor factor, he only ever defined this increase in a quantitative way according to the temporal variable.
Why did he not include ghosts and angels and imps and elves in the labour force? Was it because he was a rich businessman who wanted to get richer by getting rid of the Corn Law which helped only the landed gentry.
That is to say, he thought that the increase or change of labor, the growth of the labor factor, could be nothing other than the presence of an additional number of workers on the market,
as opposed to the ghosts of Roman legionaries getting jobs as waiters.
that is to say, the possibility of employing more hours of labor thus made available to capital.
Ricardo understood that productivity could rise through specialization and trade on the basis of comparative advantage. His rough and ready approach assumed that market forces would cause increases in productivity to spread rapidly.
Consequently there is a neutralization of the nature itself of labor, to the advantage of this single quantitative variable of hours of work and time,
No. Smith and Ricardo and so forth had a notion of productivity. They firmly believed that lazy or stupid people had very low productivity.
and basically classical economics never got out of this Ricardian reduction of the problem of labor to the simple analysis of the quantitative variable of time.
Nobody wants to get out of that quantitative variable because to do so is to die. Still, it is true that Napoleon would not have been defeated if only he had been able to escape the tyranny of the calendar. Basically, he should have said in 1813 that he wanted to skip the years 1814 and 1815 to avoid military defeat.
And then we find an analysis, or rather non-analysis of labor in Keynes which is not so different or any more developed than Ricardo’s analysis.
Keynes relied on Pigou's work. But by then it was people like Sir Arnold Plant (Coase was his student) who were doing the most useful work. Labor econ and scientific management were taking off. The Great War had shown the vital need for higher productivity. In the USSR, Taylorism (i.e. 'time-motion' studies) was a cult. Interestingly, the Soviets- who knew Marx had said 'to each according to his contribution' till scarcity disappears- put a lot of effort into work-measurement.
What is labor according to Keynes? It is a factor of production, a productive factor, but which in itself is passive and only finds employment, activity, and actuality thanks to a certain rate of investment, and on condition clearly that this is sufficiently high.
Nonsense! Keynes knew there were plenty of self-employed people. They too were badly affected by the Depression. The problem was the 'downward stickiness' of wages which prevented a frictionless fall in real wages followed by a 'real balance effect' such that those holding money would be richer and thus more inclined to spend. This was because Expectations and 'Animal Spirits' had taken a hit.
Starting from this criticism of classical economics and its analysis of labor, the problem for the neo-liberals is basically that of trying to introduce labor into the field of economic analysis.
This was successfully done long ago. In the Sixties, one innovation was the use of game theory to model job-search, hiring etc. A good example is the solution to the 'Secretary Problem'.
A number of them attempted this, the first being Theodore Schultz, who published a number of articles in the years 1950–1960 the result of which was a book published in 1971 with the title Investment in Human Capital.
He won the Nobel in 1979.
More or less at the same time, Gary Becker published a book with the same title,
they had worked together
and then there is a third text by Mincer,
who gave an equation relating earnings to experience and schooling.
which is quite fundamental and more concrete and precise than the others, on the school and wages, which appeared in 1975. In truth, the charge made by neo-liberalism that classical economics forgets labor and has never subjected it to economic analysis may seem strange when we think that, even if it is true that Ricardo entirely reduced the analysis of labor to the analysis of the quantitative variable of time, on the other hand there was someone called Marx who ... and so on.
Ricardo and Marx weren't doing econometrics using large data sets. Both were wrong. There is no fucking 'iron law of wages'.
Fine. The neo-liberals practically never argue with Marx for reasons that we may think are to do with economic snobbery,
back during the Depression, people thought he might be on to something. Indeed, there were economists like Samuelson who thought Soviet living standards might overtake those of America. By the Seventies, nobody believed this because even crazy people like the guy who shot Kennedy showed no great inclination to linger in the worker's paradise.
it’s not important. But if they took the trouble to argue with Marx
Samuelson did. He thought the 'transformation problem' was a special case from which nothing could be gleaned about the nature of production. The fact is, many different types of enterprise can 'internalize externalities'. Some may do smart things. But all can also do stupid shit. What is helpful is if stupidity is weeded out quickly. We may prefer this happens through bankruptcy rather than a Commissar getting shot in the head.
I think it is quite easy to see what they could say [about] his analysis.
Samuelson said something stupid. He was an economist and thus could do nothing else.
They would say: It is quite true that Marx makes labor the linchpin, one of the essential linchpins, of his analysis. But what does he do when he analyzes labor? What is it that he shows the worker sells? Not his labor, but his labor power.
He sells his time. He may do no work and have no labor power. It is up to his employer to detect this and sack the fellow.
He sells his labor power for a certain time against a wage established on the basis of a given situation of the market corresponding to the balance between the supply and demand of labor power.
This may or may not be the case. At the margin, an enterprise may go bust and thus its employees get nothing.
And the work performed by the worker is work that creates a value, part of which is extorted from him.
No. Extortion is what happens when a guy takes money from you in return for not sticking a knife in you.
Marx clearly sees in this process the very mechanics or logic of capitalism. And in what does this logic consist? Well, it consists in the fact that the labor in all this is “abstract,” that is to say, the concrete labor transformed into labor power, measured by time, put on the market and paid by wages, is not concrete labor; it is labor that has been cut off from its human reality, from all its qualitative variables, and precisely—this is indeed, in fact, what Marx shows—the logic of capital reduces labor to labor power and time.
If so, one cold equally say that the logic of Communism reduces leisure to leisure power and time. Did you know that Stalin refused to abolish death? Had he done so, Soviet retirees could have enjoyed an eternity of leisure.
It makes it a commodity and reduces it to the effects of value produced.
Labor is a service. Marx said his theory did not apply to services. Thus, a guy who runs a Manpower Agency- e.g. sending cleaners to different establishments as the need arises- is not engaged in the slave trade. He is merely acting as a commission agent.
Now, say the neo-liberals—and this is precisely where their criticism departs from the criticism made by Marx—what is responsible for this “abstraction.”
Abstract thinking is responsible for abstraction. Thus if I say, penises cause Rape and Rape causes the trauma that is Neo-Liberalism then I am speaking of penises in the abstract not my own penis which is why you should not cut it off.
For Marx, capitalism itself is responsible;
But penises cause rape which causes the trauma which is Neo-Liberalism which is the only thing which enables Capitalism to survive.
it is the fault of the logic of capital and of its historical reality.
People who spend a lot of money to escape from Socialist shitholes to Capitalist America find no fault with its logic or historical reality. Still, they should definitely cut off their own dicks because dicks cause RAPE!
Whereas the neo-liberals say: The abstraction of labor, which actually only appears through the variable of time,
Nope. It appears in one period economies described in textbooks.
is not the product of real capitalism,
nothing abstract is produced by anything real- save by the intervention of, in the case of Econ, the really stupid.
[but] of the economic theory that has been constructed of capitalist production. Abstraction is not the result of the real mechanics of economic processes;
unless people think they might get paid for doing it.
it derives from the way in which these processes have been reflected in classical economics.
Lots of top economists have never read any 'Classical' economist. They did a Math PhD and then got hired to work in some remunerative Econ/Fintech field. They don't derive shit from anything which does already have a mathematical representation. Kantorovich was supposed to have provided some such thing for Marxism. But the computational cost was too high.
And it is precisely because classical economics was not able to take on this analysis of labor in its concrete specification
i.e. some fairy story about how Capitalists were sodomizing and extorting money from horny handed proles
and qualitative modulations,
Proles were screaming shrilly. Then Capitalists added insult to injury by shitting on their tits. Proles cried and cried.
it is because it left this blank page, gap or vacuum in its theory, that a whole philosophy, anthropology, and politics, of which Marx is precisely the representative, rushed in.
He was a guy with a PhD in Law who did some okay journalism. Maybe if the 1848 Revolution had succeeded, he and Engels would have been as influential as Lasalle.
Consequently, we should not continue with this, in a way, realist criticism made by Marx, accusing real capitalism of having made real labor abstract; we should undertake a theoretical criticism of the way in which labor itself became abstract in economic discourse.
Why bother? Economic- as opposed to Management- discourse is abstract. If I say 'your Labor Supply function is mis-specified' I don't mean that there is anything wrong with the labor you yourself supply to the enterprise.
And, the neoliberals say, if economists see labor in such an abstract way,
rather than see it as suffering incessant rape and extortion at the hands of Capitalists
if they fail to grasp its specification,
viz the vast quantities of jizz dripping from its anus
its qualitative modulations,
e.g shrieks of pain
and the economic effects of these modulations,
e.g. rich peeps driving nice cars
it is basically because classical economists only ever envisaged the object of economics as processes of capital, of investment, of the machine, of the product, and so on.
they should have focused on the sodomization of the proletariat and the fact that Capitalists took a vast and stinky shit upon its tits.
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