Introduction
This is a continuation of an initial critique of views of the social-democratic economist, Jim Stanford. In a previous post on this topic, I showed that Mr. Stanford’s background and his nationalist idealization of Canada indicate that he likely adopts a social-democratic view of the world (see Economics for Social Democrats–but Not for the Working Class, Part One: Critique of Jim Stanford’s One-Sided View of Job Creation in a Capitalist Society). In this post, I will elaborate somewhat on such a critique in this post by looking at what Mr. Stanford claims workers sell employers.
Critique of Mr. Stanford’s Characterization of What Workers Sell
Mr. Stanford claims that what the worker sells the employer is his labour time in his book (2008) Economics for Everyone A Short Guide to the Economics of Capitalism, page 100:
When labour is bought, there is an important distinction between what the buyer purchases, and what they actually desire. Employers need someone to perform work (human effort or activity). But what they purchase, usually, is labour time: that is, a certain number of hours a worker agrees to be on the job.
Mr. Stanford may seem to make a Marxist distinction between labour power as a capacity to work and actual labour or work, but if so why does he specifically claim that what employers purchase is “labour time?”
Indeed, Stanford, earlier on the same page, contradicts himself by claiming that workers sell labour (and not labour time):
By definition, wage labourers must sell their labour to survive.
Indeed, Stanford expresses this contradiction in one and the same sentence on the same page:
Converting time into work is a central and complicated problem of employment.
If labour time is what the workers sell, then there would not arise any need to “convert time into work”–since what the worker sells, in one version of Stanford’s confused theory, is labour. If workers sell their labour, then it is work, is it not? If, on the other hand, what the workers sell is labour time, then there is no need to “convert time into work” since what is sold is already converted into labour time.
There is one reviewer who notes the limitations of Stanford’s views concering the nature of what workers sell to employers. Amit Basole (2010), in pages 584-587, Review of Radical Political Economics, Volume 43, Number 4, page 585:
Chapter five (Work, Production and Value) attempts an important but also difficult task and it succeeds only partially. In explaining the nature of value and surplus value, Stanford flirts with the labor theory of value only to abandon it quickly and move on to a somewhat less controversial approach that sees wages and profits as opposed to each other more or less empirically, without strong theoretical background (though there is a box on Sraffa and his efforts). Later in chapter eight he does a good job explaining the difference between labor time and labor effort (or labor-power and labor) and how it gives rise to the “labor extraction problem,” but unfortunately he does not invoke the same distinction in the earlier discussion on the labor theory of value. Thus at the micro level there is some lack of clarity on where surplus comes from. If such an understanding of surplus and profits is desired, Stanford’s text on its own will not do the job.
In other parts of his review, though, the writer is too generous in his evaluation of Stanford’s work since the work evidently reflects a radical social-reformist point of view that seeks to create a humanized capitalism but not its overcoming.
Marx’s Distinction Between Labour Power, Which Is What Workers Sell, and Labour
Marx, by contrast, makes a clear distinction between labour power or labour capacity and labour. From Capital, volume 1, page 277:
When we speak of labour, or capacity for labour, we speak at the same time of the worker and his means of subsistence, of the worker and his wages.’10 When we speak of capacity for labour, we do not speak of labour, any more than we speak of digestion when we speak of capacity for digestion. As is well known, the latter process requires something more than a good stomach. When we speak of capacity for labour, we do not abstract from the necessary means of subsistence. On the contrary, their value is expressed in its value. If his capacity for labour remains unsold, this is of no advantage to the worker. He will rather feel it to be a cruel nature-imposed necessity that his capacity for labour has required for its production a definite quantity of the means of subsistence, and will continue to require this for its reproduction. Then, like Sismondi, he will discover that ‘the capacity for labour … is nothing unless it is sold ‘.
Labour power is a capacity for labour–a potentiality, not an actuality. It expresses the separation of workers from both their means of subsistence (consumer goods) and their means of producing their lives indirectly (means of production).
The concept of “labour power” captures one aspect of the employer-employee relation–the separation of workers from the conditions for the production of their lives. It is another class that controls the conditions (machines, buildings, computers, raw materials, utilities such as light, and so forth). Until the workers are incorporated into the labour process dominated by the class of employers, they remain separate from the means of producing their lives. Outside that context, they have greater control over their own body (although it should not be forgotten that the capitalist state also limits such control over their body).
Consequently, Stanford’s idea that what workers sell is labour time is logically flawed. How can workers sell labour time if labour time involves their connection with the means of production? Once workers are connected to the means of production, they no longer can sell their labour power because it has already been sold–with their subordination to the power of employers as the right of management to direct operations as it sees fit (with limitations specified by collective agreements (if they exist) and legislation). In other words, despite the appearances in a capitalist economy to the contrary, labour time cannot be sold to the employer because actual labour time already presupposes the sale of labour power (which is in a state of separation from the means of producton), as Patrick Murray (2016), in his work The Mismeasure of Wealth: Essays on Marx and Social Form, argues on pages 195-196:
One crucial instance of Marx’s critique of common language concerns the phrase ‘the value of labour’ (as opposed to ‘the value of labour-power’). The surface grammar is unobjectionable; the phrase is perfectly well formed. But a closer look reveals the confusion in it: ‘On the surface of bourgeois society the worker’s wage appears as the price of labour, as a certain quantity of money that is paid for a certain quantity of labour. Thus people speak of the value of labour’. Marx contends that the phrase ‘the value of labour’ is grammatically flawed for two reasons: (1) only commodities have value, and labour is not a commodity. For labour to be sold as a commodity, the wage labourer would have to own it. But wage labourers are unable to labour until they get access to means of production. And that occurs only as a result of the sale of their labour power to the capitalist.
This distinction between the transfer of use of labour power to the employer and the actual use is what Stanford is getting at:
… there is an important distinction between what the buyer purchases, and what they actually desire. Employers need someone to perform work (human effort or activity). But what they purchase, usually, is labour time: that is, a certain number of hours a worker agrees to be on the job.
This distinction and its implications for class struggle at work (resistance to the conversion of workers into mere workers or mere abstract labour for example) hardly needs reference to any sale of labour time; Marx’s clear distinction is superior to Stanford’s since it clearly distinguishes between the sale of labour power as it operates in exchange and the actual use of what is purchased as it operates in production–two different (but interrelated) relations: sale and purchase, on the one hand, and production of commodities (in the case of private employers) on the other.
The Distinction Between Labour Power and Labour is a Distinction within a Contradictory Unity
As Jorgen Sandemose (October 2014) notes (“Flaws and Excellence: From Leftism to Marxism,” In pages 521-534, Science & Society, Volume 78, Number 4, October 2014), the employer-employee relation is characterized by a unity of unity and separation, where the second unity is actual work, the separation is the separation of workers from the indirect conditions for producing their own lives, and the whole process as the unity composed of both unity and separation. Page 528:
… capitalist production must be “real,” defined as a unity of unity and separation, not simply as a separation from the means of production. For in actual production, the laborer’s activity is in unity with them.
As labour power, workers are separated from their means of subsistence or consumer goods and from the indirect means of producing their own lives. What they sell to the employer is not “labour time” but their right to use their own body for a certain period of time. They cannot sell labour time since labour time is the actual performance of labour. Once workers sell their labour power, they then are united with the indirect means of producing their own lives, and they produce both those indirect means and their means of subsistence or consumer goods and purchase those means of subsistence by means of the wage or salary they receive. Once work is finished, they then become separated from the indirect means of producing their lives and are united with their direct means of producing their own lives via the consumption of consumer goods. The consumption of these consumer goods then requires them to sell their labour power again.
Stanford misses an important analytic–and political–concern in Marx’s distinction of labour power and labour. Christian Iber (2013), in his work Elements of the Marxian Theory of Capitalism: A Commentary on Volume One of Karl Marx’s Capital, (page 322) points this out:
The worker does not sell labour, but rather his labour power. And the concept of labour power, the capacity to labour, permits one to conceive that work is by no means the means of the reproduction of the worker, but rather the contrary: the reproduction of the worker is the means for labour that he concedes for the use of the capitalist. [my translation; see the Appendix at the end of this post for the original]
Iber’s formulation–that the worker concedes his labour–is inaccurate since the worker cannot concede what he does not own and control.
Mr. Stanford’s Contradictory Recognition of the Difference Between Actual Work Performed and the Time Workers Concede for the Use of Their Labour Power
Mr. Stanford recognizes that workers may not engage in actual work when they sell what they sell, but this recognition contradicts his own claim that workers sell their labour time and the employer purchases labour time. Page 99:
Labour is alive. Labourers are living, thinking beings, who can influence their surroundings and circumstances. One important consequence of this is that they always find ways – individual or collective – to resist work arrangements or practices they believe are unfair.
Mr. Stanford thus makes a distinction between time and work, but he fails to explain why there should be such a distinction if what the employ purchases is labour time. Pages 100-101:
Converting time into work is a central and complicated problem of employment. Moreover, it happens inside the firm, in a context of hierarchical control and management authority, not through a “market.”
If time is actually converted into work outside the market, then how is it possible to sell labour time since selling involves a market (of commodities to be bought and sold and sellers and buyers)? [By the way, I did not know that “labour was alive;” I always thought it was the workers who were alive and that it was labour that they performed. But that only in passing.)
Mr. Stanford, apparently, wants to distance himself from Marxian economics while attempting to incorporate its insights. Logically, though, if employers purchase labour time rather than labour power, there should be no problem in converting their money into labour time, or into actual labour for a certain period of time. In other words, Mr. Stanford contradicts himself.
Geert Reuten (2019) points this out the illogical nature of the concept of selling labour in his book The Unity of the Capitalist economy and State: A Systematic-Dialectical Exposition of the Capitalist System on page 68:
3 Labour-capacity
In contradistinction to means of production, ‘labour’ is not produced in the past, as it is the activity of production itself. If anything, it is labour-capacity that is “produced” previously.
Workers cannot sell labour time since labour time is the actual performance of labour. Once workers sell their labour power, they then are united with the indirect means of producing their own lives, and they produce both those indirect means and their means of subsistence or consumer goods and purchase those means of subsistence by means of the wage or salary they receive.
As Elena Lange points out (2021, Value without Fetish: Uno Kōzō’s Theory of ‘Pure Capitalism’ in Light of Marx’s Critique of Political Economy), page 148, by quoting Sáenz de Sicilia:
…the purchase of labour-power is the basis for its subsequent determination as
activity … [it] is the means by which the worker, qua living labour … is incorporated
into capital, functionally determined as one of the elements (the essential element in fact) of its life-process: variable capital.
Once work is finished, workers then become separated from the indirect means of producing their lives and are united with their direct means of producing their own lives via the consumption of consumer goods after they have spent the money received from the employer. The consumption of these consumer goods then requires them to sell their labour power again–and again and again.
A similar analysis of the unity in separation is provided by Laurent Baronian (2013), in his Marx and Living Labour, pages 82-83:
4.1 The two phases in the exchange between capital and living labour
The capitalist mode of production, which arose from the ruins of feudal society, is founded on the labour power as an exchangeable thing, i.e. a commodity. But this form of existence of labour power precisely implies the separation between the labourer and his material conditions of production. On the other hand, only the combination of subjective and objective factors of the labour process allows capital to valorise, i.e. to produce surplus value by appropriation of living labour (surplus labour). Therefore exchange between capital and labour is divided into two totally distinct moments whose unity forms the secret of surplus value and different headings between which it is distributed (profit, rent, interest). Surplus value indeed precisely comes from the difference between exchange value of the labour power commodity, namely the labour time necessary for reproduction of
the labour power, and the living labour time expended by the labourer in the production
process. In the first phase, which takes place on the market, capital and labour exchange two equal values: the quantity of labour incorporated into the means of subsistence and the quantity of labour necessary for the reproduction of the worker. This phase of ‘exchange between capital and labour, once it itself exists as the simple relationship of circulation, is not an exchange between money and labour, but the exchange between money and living labour capacity’ (Marx, 1987b: 506). In the second phase, which takes place in the production process, exchange between objectified labour and living labour consists in ‘the objectification in commodities of a surplus of unpaid labour, surplus value, over and above the labour which was objectified in wages, hence in the production of surplus value’; the second moment of exchange between capital and labour distinguishes
itself by ‘the exchange of less objectified labour for more living labour’ (Marx, 1994: 416). This is what confers to the part of capital advanced in wages its quality of variable capital, by comparison with constant capital represented in the objective means of production. ‘The place of the value of the labour power that obtains within the advanced capital is taken in the actually functioning productive capital by living value creating labour power itself ’
(Marx, 1998: 32). In the first phase, the labourer sells the exchange value of his/her labour power to the capitalist. In the second phase, the capitalist consumes the worker’s labour power. As long as the difference between objectified labour in the labour power (or wages) and living labour realised by this moving force is not explicitly established, the origin of profit remains obscure and appears to contradict the law of equivalents exchange. For how can one justify, for instance, that a quantity of corn exchanges for a quantity of labour higher than the quantity materialised into it? We will see how economists have attempted to solve the problem by identifying living labour with the value of labour power, namely
wages. However, the analysis of the two moments of exchange between capital and labour does not simply penetrate the secrets of surplus value. It dissolves at the same time the conception of capital that crosses the whole history of political economy and conditions its profound unity.
First, the capital represented in the means of subsistence exchanged for labour power in the sphere of circulation has nothing to do with the production process, unlike capital represented in the means of production. While constant capital remains fixed in the sphere of production, variable capital never leaves the sphere of circulation. What enters the sphere of production is the labour power itself, whose use value consists in the productive activity, i.e. in living labour.The use value shape this part of the capital has as a commodity before its
entry into the production process – as means of subsistence – is therefore
entirely different from the shape it assumes within that process, which is that
of labour power expressing itself in working activity, hence of living labour
itself. (Marx, 1994: 393)These means of subsistence do not consist in material means of the capitalist
production process ‘although they do constitute the material form of existence of the variable capital which figures on the market, within the sphere of circulation, as the buyer of labour capacity’ (Marx, 1994: 412). According to Marx, if political economy was never able to establish the difference between these two moments, it is basically because it always confused labour as a living factor of production with labour as represented in ‘the value of labour’, namely wages.
Yetthe value of the means of production, the constant capital, enters as such
into the valorisation process, whereas the value of the variable capital does not enter into it at all, but is replaced by the value-creating activity of the living factor, an activity which exists as the valorisation process. (Marx, 1994: 396)
Although Baronian outlines the two sets of relations (exchange and production or work) between employers and workers, his labelling of the second phase as an exchange needs to be crticized–there is no exchange at all since the relation is no longer a relation between objectified commodities but between one objectified commodity–the means of production or work (computers, other machines, buildings, raw materials, office supplies, chairs, tools, auxiliary work instruments (such as containers for supplies) and so forth] and the use of labour power (labour)–which is hardly a relation of exchange. As Marx writes in the Grundrisse: Foundations of the Critique of Political Economy, page 275):
In the exchange between capital and labour, the first act is an exchange, falls entirely within ordinary circulation ; the second is a process qualitatively different from exchange, and only by misuse could it have been called any sort of exchange at all. It stands directly opposite exchange ; essentially different category.
One further point. Stanford speaks of the sale of “labour time.” Even if it were possible for workers to sell their labour time, it would remain unclear on Stanford’s account to which labour time he is referring: concrete labour time (the actual hours of labour expended) or abstract labour time, measured by socially necessary labour time (hours expended as demanded by the average conditions prevailing in producing and reproducing commodities produced capitalistally.
Labour time is the time during which, on the one hand, workers produce a use value (say beer) and, on the other, produce value, or objectified social labour. In a capitalist society, there is a possible (and probable) difference between the concrete labour time expended and the labour time that is socially expended. In other words, a unit of labour time expended, concretely, need not coincide with the unit of abstract labour. Stanford seemly ignores the difference by referring to “labour time.”
Hypothesis About Mr. Stanford’s Contradictory Claim that Workers Sell Their Labour Time–His Ambivalence Towards, and Lack of Understanding of, Marxian Economics
Mr. Stanford seems to want to have his cake and eat it too. He wants to incorporate Marx’s distinction of labour power as what the worker sells the employer and labour, which is what workers perform in a capitalist society but which is subject to control by the representatives of the employer, managers. On the other hand, he does not want to adopt such a distinction explicitly and consistently since he opposes Marx’s theory of value. Here is what he has to say on this score (page 54):
Workers formed unions and political parties to fight for a better deal, often encountering violent responses from employers and governments. An economic underpinning for this fightback was provided by Karl Marx. Like the classical economists, he focused on the dynamic evolution of capitalism as a system, and the turbulent relationships between different classes. He argued that the payment of profit on private investments did not reflect any particular economic function, but was only a social relationship. Profit represented a new, more subtle form of EXPLOITATION: an indirect, effective way of capturing economic surplus from those (the workers) who truly do the work. Marx tried (unsuccessfully) [my emphasis] to explain how prices in capitalism (which include the payment of profit) could still be based on the underlying labour values of different commodities.
For a critique of Stanford’s view of prices (as reflected in his theory of money as purchasing power (which is, indirectly, also a theory of prices, see Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One , Economics for Social Democrats–but not for the Working Class, Part Two: Critique of Jim Stanford’s Theory of Money, Part Two and Economics for Social Democrats–but not for the Working Class, Part Three: Critique of Jim Stanford’s Theory of Money, Part Three, or How Commodities and Money Dominate Our Lives ).
On page 71, Mr. Stanford writes:
For simplicity, the classical economists adopted a labour theory of value. In this theory, the prices of producible commodities reflect the total amount of labour required to produce them (including both direct labour and the indirect labour required to produce machines and raw materials used in production – a complication we’ll discuss in the next chapter). Marx realized this simplified theory was wrong: prices under capitalism must also reflect the payment of profit. But he was politically committed to explaining prices on the basis of their “underlying” labour values, so he undertook a complicated (and ultimately unsuccessful) [my emphasis] attempt to explain prices on the basis of labour values.
Mr. Stanford claims that it was for “political reasons” that Marx adopted a labour theory of value. Marx’s theory of value is certainly meant to explain money, but it was certainly also meant to explain much more, such as the necessary deviation of prices not only due to the constant difference between supply and demand of produced commodities but also because of the difference between the amount of surplus value produced in a particular firm or industry and the amount received (distributed) to the particular capitalists on the basis of the total surplus value produced by workers and appropriated by the capitalist class as a whole (see my comments in the post The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada for an explanation of this difference between the production of surplus value and its distribution).
On page 72, Stanford writes:
Exploitation and Algebra
Here’s an interesting historical note regarding the endless controversies in economics over how to measure “value.” Pierro Sraffa was an Italian economist who worked in Cambridge, England in the midtwentieth century (alongside Keynes, Kalecki, and the other famous heterodox economists based there). He developed a technique for explaining relative prices on the basis of the amount of direct labour involved in production, the indirect labour embodied in inputs of raw materials and machinery, and (under capitalism) the payment of profit on invested capital. He showed (with a little modern algebra) that Marx didn’t need to worry about “transforming” labour values into prices. In fact, without any labour theory of value, Sraffa still proved that an inverse relationship must exist between wages and profi ts: if one is higher, the other must be lower. This was utterly contrary to the conclusion of neoclassical economists that labour and capital have complementary interests, rather than conflicting interests. Throw in appropriate political terminology (if desired), and Sraffa’s theories prove that labour is the ultimate source of production, and that the payment of profit represents the capture (or “exploitation”) of a share of the surplus that workers produce. [my emphasis]
When you combine Mr. Stanford’s claims that 1. Marx unsuccessfully explained prices via his theory of value; 2. with the claim that Marx adopted his labour theory of value for political reasons, and, finally, 3.”labour is the ultimate source of production,” there is again an expression of Mr. Stanford’s ambivalent views on Marx’s theory. Stanford wants to attribute labour as the ultimate sole source of “production” for political reasons while throwing out the labour theory of value that he attributes to Marx.
Unfortunately for Mr. Stanford, his implicit attribution to Marx that labour is the ultimate source of production contradicts Marx’s own political statement (from Marx-Engels Collected Works, Volume 24, “Marginal Notes on the Programme of the German Workers’ Party” [Critique of the Gotha Programme], page 81:
1 . “Labour is the source of all wealth and all culture, and since useful labour is possible only in society and through society, the proceeds of labour belong undiminished with equal right to all members of society.”
First part of the paragraph: “Labour is the source of all wealth and all culture. “
Labour is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labour, which itself is only the manifestation of a force of nature, human labour power. The above phrase is to be found in all children’s primers and is correct insofar as it is implied that labour is performed with the pertinent objects and instruments. But a socialist programme cannot allow such bourgeois phrases to pass over in silence the conditions that alone give them meaning. And insofar as man from the outset behaves towards nature, the primary source of all instruments and objects of labour, as an owner, treats her as belonging to him, his labour becomes the source of use values, therefore also of wealth. The bourgeois have very good grounds for ascribing supernatural creative power to labour; since precisely from the fact that labour is determined by nature, it follows that the man who possesses no other property than his labour power must, in all conditions of society and culture, be the slave of other men who have made themselves the owners of the material conditions of labour. He can work only with their permission, hence live only with their permission.
Marx obviously had a different theory than what Mr. Stanford attributes to him if he denies that labour is the source of all wealth. Indeed, Mr. Stanford seems oblivious to the fact that Marx had a dual theory of labour and not some single “labour theory of value.”
Conclusion
Mr. Stanford’s claim that what employers purchase from workers is their labour time (or labour) is contradictory. This contradiction is probably due to his attempt to incorporate Marx’s distinction between labour power and labour into his theory while failing to understand Marx’s “labour” theory of value since Mr. Stanford unlikely can account for why Marx would deny, on the one hand, that labour is the source of all wealth–while still holding on the other hand that only labour produces value.
Mr. Stanford’s “economics for everyone,” so far, is not an economics for the working class. It is a confused economics that tries to appropriate some of Marx’s insights while misunderstanding Marx’s theory.
It is characteristic of the left here in Toronto and elsewhere that Stanford is considered a “progressive” economist. Would not the interests of the working class be better served, though, by analyzing whether what Stanford writes reflects the nature of a capitalist society and not a confused version of it?
A second post will follow up on the issue by criticizing the implication of the view that workers sell their labour (time) by pointing out that labour in a capitalist society is not immediatly social labour–but this is what is implied in the view that workers sell their labour (time) and not their labour power.
Appendix
The following is the original language version of one of the above authors’ quotes.
Christian Iber (2013), Elementos da Teoria Marxiana do Capitalismo: Un comentario sobre o livro I de O Capital de Karl Marx (page 322):
O trabalhador não vende trabalho, mas sim a sua força de trabalho. E o conceito de força de trabalho, a capacidade a trabalhar, deixa conhecer que o trabalho não é de modo algum o meio de reprodução do trabalhador, mas sim o contrário: a reprodução do trabalhador é o meio para o trabalho que ele concede para o uso do capitalista.
The Abolitionary 