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The Marxist perspective is that the employer is incentivized to pay as little as possible to extract the maximum amount of value from the person's labor, realiz

The Marxist perspective is that the employer is incentivized to pay as little as possible to extract the maximum amount of value from the person's labor, realizing the difference as profit (even though crucially that value was created by the worker). An example of this would be software engineers at companies like Apple and Google, whose labor has been shown to produce several times the value of their compensation. Unions and worker cooperatives are meant to counterbalance these forces by giving workers more negotiating power in the case of the former, or aligning the profit motive with employee compensation for the latter.

cmrdporcupine 6y ago
I think it's more correct to say that the Marxist (well, labour theory of value) perspective is not that the employer is incentivized as such, but they _have_ to. That the capitalist market _requires_ it or it doesn't work, business won't survive. It's intrinsic to the profit / wage-labour model, even if you switch to something like cooperatives or state ownership. The theory is that surplus value (which can become profit, or be reinvested, etc) exists only through paying the worker less (on aggregate) than the aggregate amount that the worker provides through their labour. The mainstream economics answer to this is to say that the labour theory of value is bunk and that prices are defined purely by market forces. But this kind of misses the bigger picture of what Marx was getting at rather by getting lost in the weeds about price definitions and really is a critique of Ricardo more than Marx. Despite using the term "exploitation" which has moral overtones in English, Marx really isn't casting a moral judgement here. It's a technical description. But he does believe that this phenomenon leads to structural inequality and injustice and that the only resolution is some other kind of property ownership or method of production. Though he was famously vague on what that alternative would be, and people far less intelligent than him were left to fill in the blanks with some rather awful alternatives.
- abvdasker 6y ago
  Thank you for the more precise definition. Broadly I think Hacker News could use a little more discussion of Marx, which is why I brought it up.
  - cmrdporcupine 6y ago
    Hah, here we go, a few minutes of meaningful conversation and then when I check back in the conversation... downvoted to -1 by a bunch of guys who read Ayn Rand when they were 16 and now know better than everyone. :-) I think that discussion you want will probably have to take place somewhere else.
- claudiawerner 6y ago
  >But this kind of misses the bigger picture of what Marx was getting at rather by getting lost in the weeds about price definitions and really is a critique of Ricardo more than Marx. This is very true, and cannot be overstated. Often, the criticisms of one theory are actually much better direceted at a predecessor theory. Students in a history of economics course, or a regular economics course, may learn of the "labour theory of value", but they may learn either Smith's, Ricardo's, or Marx's, and assume that the theories are the same, or that the same criticisms apply to all of them. There are good and serious criticisms of the "labour theory of value" from those unsympathetic (and even those sympathetic) to its apparent normative conclusions. It's a shame that many people seem to confuse one thinker for another, especially when each boasted of their improvements (Marx, for example, writes "I was the first to point out and examine this [...]" when writing on the "LTV" and discussed the law of the tendency for the rate of profit to fall again in his original understanding, despite being extremely well read on - and critical of - his predecessors).
throwaway894345 6y ago
> even though crucially that value was created by the worker Crucially the value wasn't created by the worker, but rather the worker played a part in the creation of that value. In a capitalist society, that worker's wage is determined based on the value of their contribution and the supply of workers with the requisite skill. In a Marxist society, it is set by the state, and it seems to be very hard for states to determine a price that is sustainable. In my humble opinion, Marxism seems like a denial of basic economic realities--namely that the state can set the price of anything to whichever value they prefer and it won't have disastrous economic ramifications ("price is just an arbitrary number"). Maybe I'm creating a straw man, but I do notice a lot of Marxists who make arguments about what is fair and not what is economically sustainable as though economic sustainability is an invented problem that we can disregard. Perhaps this view isn't uniformly shared among Marxists, in which case my criticism is "too many Marxists are making these kinds of unconvincing arguments, and more convincing arguments would be centered around economic feasibility--we all agree that we want poor people to have more money, the question is 'how?'".
- cmrdporcupine 6y ago
  Marx never said anything about the state setting prices. Wasn't part of his analysis. He was only concerned with analyzing how prices came to be what they are under capitalism, and what the consequences of that are He did feel that some other model of ownership & management could lead to some other form of remuneration, but he definitely left it unclear. Read the other discussions on this thread, there's far more nuance here than I think you're understanding.
  - throwaway894345 6y ago
    You're making a motte/bailey argument, but either way it doesn't look good for the 'Marxist'. If a Marxist is one who says "Capitalism is imperfect; I've got a gut feeling that there is a better system out there, but no idea what it looks like concretely", then that may be correct but it's close to worthless. If a Marxist is someone who says "Capitalism is imperfect; the state needs to fix the price of $X (labor, etc)" with no mention of the economic feasibility of said price-fixing, then that's better but still far from persuasive. My criticism was directed at the latter. There are perhaps many good Marxists who make convincing economic arguments; I'm asking for more of this.

cmrdporcupine 6y ago

I think it's more correct to say that the Marxist (well, labour theory of value) perspective is not that the employer is incentivized as such, but they _have_ to. That the capitalist market _requires_ it or it doesn't work, business won't survive. It's intrinsic to the profit / wage-labour model, even if you switch to something like cooperatives or state ownership. The theory is that surplus value (which can become profit, or be reinvested, etc) exists only through paying the worker less (on aggregate) than the aggregate amount that the worker provides through their labour. The mainstream economics answer to this is to say that the labour theory of value is bunk and that prices are defined purely by market forces. But this kind of misses the bigger picture of what Marx was getting at rather by getting lost in the weeds about price definitions and really is a critique of Ricardo more than Marx. Despite using the term "exploitation" which has moral overtones in English, Marx really isn't casting a moral judgement here. It's a technical description. But he does believe that this phenomenon leads to structural inequality and injustice and that the only resolution is some other kind of property ownership or method of production. Though he was famously vague on what that alternative would be, and people far less intelligent than him were left to fill in the blanks with some rather awful alternatives.

abvdasker 6y ago
Thank you for the more precise definition. Broadly I think Hacker News could use a little more discussion of Marx, which is why I brought it up.
- cmrdporcupine 6y ago
  Hah, here we go, a few minutes of meaningful conversation and then when I check back in the conversation... downvoted to -1 by a bunch of guys who read Ayn Rand when they were 16 and now know better than everyone. :-) I think that discussion you want will probably have to take place somewhere else.
claudiawerner 6y ago
>But this kind of misses the bigger picture of what Marx was getting at rather by getting lost in the weeds about price definitions and really is a critique of Ricardo more than Marx. This is very true, and cannot be overstated. Often, the criticisms of one theory are actually much better direceted at a predecessor theory. Students in a history of economics course, or a regular economics course, may learn of the "labour theory of value", but they may learn either Smith's, Ricardo's, or Marx's, and assume that the theories are the same, or that the same criticisms apply to all of them. There are good and serious criticisms of the "labour theory of value" from those unsympathetic (and even those sympathetic) to its apparent normative conclusions. It's a shame that many people seem to confuse one thinker for another, especially when each boasted of their improvements (Marx, for example, writes "I was the first to point out and examine this [...]" when writing on the "LTV" and discussed the law of the tendency for the rate of profit to fall again in his original understanding, despite being extremely well read on - and critical of - his predecessors).

throwaway894345 6y ago

> even though crucially that value was created by the worker Crucially the value wasn't created by the worker, but rather the worker played a part in the creation of that value. In a capitalist society, that worker's wage is determined based on the value of their contribution and the supply of workers with the requisite skill. In a Marxist society, it is set by the state, and it seems to be very hard for states to determine a price that is sustainable. In my humble opinion, Marxism seems like a denial of basic economic realities--namely that the state can set the price of anything to whichever value they prefer and it won't have disastrous economic ramifications ("price is just an arbitrary number"). Maybe I'm creating a straw man, but I do notice a lot of Marxists who make arguments about what is fair and not what is economically sustainable as though economic sustainability is an invented problem that we can disregard. Perhaps this view isn't uniformly shared among Marxists, in which case my criticism is "too many Marxists are making these kinds of unconvincing arguments, and more convincing arguments would be centered around economic feasibility--we all agree that we want poor people to have more money, the question is 'how?'".

cmrdporcupine 6y ago
Marx never said anything about the state setting prices. Wasn't part of his analysis. He was only concerned with analyzing how prices came to be what they are under capitalism, and what the consequences of that are He did feel that some other model of ownership & management could lead to some other form of remuneration, but he definitely left it unclear. Read the other discussions on this thread, there's far more nuance here than I think you're understanding.
- throwaway894345 6y ago
  You're making a motte/bailey argument, but either way it doesn't look good for the 'Marxist'. If a Marxist is one who says "Capitalism is imperfect; I've got a gut feeling that there is a better system out there, but no idea what it looks like concretely", then that may be correct but it's close to worthless. If a Marxist is someone who says "Capitalism is imperfect; the state needs to fix the price of $X (labor, etc)" with no mention of the economic feasibility of said price-fixing, then that's better but still far from persuasive. My criticism was directed at the latter. There are perhaps many good Marxists who make convincing economic arguments; I'm asking for more of this.